Survey: More families using student loans to help fund college
RIVERWOODS -- The fifth annual survey from Discover Student Loans reveals that parents are slightly less worried when it comes to having the funds to pay for college while nearly half, 48 percent, expect their child to pay for all or most of their education, up from 39 percent in 2012.
"While a vast majority of parents still report that they want to help their children pay for college, it's clear that students are being asked to take on more financial ownership than in previous years," said Danny Ray, president of Discover Student Loans. "With an increase in responsibility comes the need to be prepared, and we encourage families to have discussions early and often on how to pay for college."
The cost of college is an important factor when deciding on a school and 43 percent of parents responded saying that they are limiting their child's college choice based on price. Interestingly, this number has decreased since last year, when nearly half, 48 percent, said price was limiting the choice of college.
To help pay for college, 55 percent of parents say their children plan to use student loans to pay for college, up from 50 percent in 2012. Parents also appear to be more willing to help their children if they take out student loans, as 61 percent are very or somewhat likely to help them pay back loans, up from 55 percent of parents in 2012.
However, the majority of college-bound students appear to be missing out on an opportunity for federal student aid. According to the 2016 survey, only 44 percent of families completed the Free Application for Federal Student Aid.
"We're happy that 95 percent of parents responded saying they continue to see the value in their child earning a college degree, but we want them to be clear on the financial aid and student loan processes," said Ray. "Filling out the FAFSA is the first step in determining college financial aid eligibility, and we provide useful tools to help families through that process. If families are left with a gap amount after exploring scholarships and grants, then we encourage them to review all their options and determine what works best for their situation."
When learning about scholarships, grants and loans, students are turning to a variety of resources. When asked to consider the most reliable sources of information, eleven percent of families said high school guidance counselors, up four percent from last year, and 40 percent of parents said college financial aid offices, which is a decline from 47 percent in 2012.
Parents appear to be slightly less worried about the long-term financial impact student loans may have on their child's future. While half of parents responded saying they were very worried that student debt may affect their child's ability to buy a house, car or other large purchase, the number is down from 58 percent and 55 percent in 2015 and 2014, respectively.