What does paying for college during life’s “new normal” and current economic climate look like? A new survey highlights parent plans and concerns regarding the upcoming 2021-2022 school year.
The College Ave Student Loans survey of parents of undergraduate students conducted by Barnes & Noble College Insights found that of those planning to help their child pay for college, 52% said the pandemic will make it more difficult to pay this fall and 45% said it’s changed how they plan to pay, with 51% using more savings, 45% borrowing more in student loans, and 27% taking out a parent loan.
Despite new challenges, the commitment to higher education remains steadfast: 93% of families agree obtaining a college degree is more important than ever.
“The pandemic has presented new obstacles, yet as this survey highlights, families are incredibly resilient and determined to help their child obtain a higher education,” says Angela Colatriano, chief marketing officer of College Ave Student Loans.
If higher education costs are on the horizon for you, the survey results suggest keeping these tips in mind:
• Anticipate spending more. Parents across the board reported college expenses being more than they expected, including college tuition and fees (81%), room and board/rent and food (77%), school activities and fees (61%) and books and supplies (57%). Plan and budget accordingly.
• Plan to use multiple sources. While 78% of parents put money aside for their child’s education, only 17% said savings could cover the full cost. Be prepared to look at a variety of funding sources.
• Maximize financial aid. Complete the FAFSA (Free Application for Federal Student Aid) every year your child attends college. This important form is the gateway to scholarships, grants, work-study and federal student loans. If your financial situation has substantially changed since last year, reach out to your school’s financial aid office for help and resources.
• Search for scholarships. Grants and scholarships were the top method used to pay for college, ahead of parent savings and income. One easy one to consider is the $1,000 monthly scholarship sweepstakes from College Ave.
• Tune up your credit. Of those surveyed, 53% plan to use student loans and 26% plan to use parent loans. Get a copy of your credit report and review your credit score, particularly if you think you may need private student loans in addition to federal. Reach out to the credit reporting agency to address any errors. Credit history and credit score will impact whether you’re approved for a private student loan, as well as the interest rate.
• Encourage your child to contribute. Sixty-nine percent of parents expect their child to help chip in and 52% expect their child to find a job while in college.
• Balance other financial commitments. When it comes to balancing other commitments, you can take comfort that you’re not alone. Fifty-eight percent of parents are stressed about balancing their retirement and paying for college. Look at your balance of retirement savings, obligations, and goals to give you a clearer picture on where you stand and what you can afford to contribute towards college.
A majority of families surveyed wish more planning resources existed. If that describes you, check out the savings strategies and insights from college and personal finance experts available at collegeave.com.
While funding the 2021-2022 school year may be more difficult than you previously anticipated, having a solid plan and knowing all your options can help ensure a college education remains within reach.