Most Americans, 56%, report being willing to incur debt to pay for their children’s college education, Country Financial learned in a survey. On average, individuals say they would take on $31,000; for men, this is $35,000 and for women, $27,000.
Seventy-five percent think it is important to have a college degree when looking for a job, and 65% think the degree is worth the investment.
“Parents obviously want to do whatever is in their power to help their children get a leg up in life,” says Doyle Williams, executive vice president at Country Financial. “However, taking on tens of thousands of dollars of debt can have a major impact on their ability to save and prepare for their own financial future. If paying for a child’s education is a priority, then successfully integrating college funding into one’s overall savings and retirement goals is all-important. Talking with a trusted financial planner can help you align your priorities and create a strategy to reach them.”
Citing the College Board’s 2018 report on trends in college pricing, Country Financial notes that in-state tuition and fees at public four-year institutions have increased about 3% a year beyond inflation in the past decade.
While 36% of parents with children age 5 or younger are saving for their college education, 30% have saved nothing, and 40% say having a child is more expensive than they anticipated.
The outlook among those saving is rather bleak. Only 81% of parents either predict or report that their savings is covering between 81% and 100% of their child’s college education, and 60% think they will be able to cover just 60% at most.
“Even if you plan to assist your child with the financial costs associated with college, our survey’s findings show that the majority of families are not able to cover the full tuition costs out-of-pocket,” Williams says. “Parents should be honest with their kids about what they will pay for and then research all of the options the child has for furthering his or her education.”
Country Financial learned that 61% of students work while attending college, 27% attend community college, 42% apply for financial aid, and 39% take out student loans.
On top of the stress of paying for their child’s schooling, 55% of parents say it has or will take five years or longer to pay off their own student loans, and 7% think they will never be able to pay them off. Thirty percent of parents who have their own student loan debt say they’d be unwilling to take on additional debt, for their child.
Among college graduates, 36% say it will take over 10 years to pay off this debt. Those who do not work with a financial planner are more likely than those who do to say they have put no money aside for their child’s education (25% vs. 11%).