Half of U.S. Students Lack Confidence About Repaying Student Loans
Only half of all students who take out loans to pay for their college feel confident that they can repay them, a new survey, commissioned by College Ave Student Loans and conducted by Barnes & Noble College Insights, found.
Out of the 1,019 undergraduate students who participated in the survey, 43 percent borrowed federal loans and 12 percent borrowed private student loans. Only 49 percent felt confident that they would be able to successfully pay these loans back.
Furthermore, nearly 63 percent of the students who took on loan debt reported not fully understanding the financial terms associated with them. 86 percent, however, cited that they knew they will likely repay more than they originally borrowed.
Student loans are also motivating graduates to start working early. 58 percent of those surveyed reported that their loan debt will likely motivate them to land a job faster, with 36 percent saying they plan to take up two or more jobs to erase their total debts.
“Our survey highlights that though student loans play a significant role in helping students achieve their college degree, more can be done to help educate students on responsible borrowing,” Joe DePaulo, CEO and co-founder of College Ave Student Loans, said.
The survey also found that nearly 55 percent of students plan to pay back their loans on their own without seeking help from their parents.
Even so, many parents are also struggling to pay off their own student debts. Another survey conducted by COUNTRY Financial found that for 55 percent of parents, it would take or has taken five years or longer to pay off their loans. About 7 percent of parents also predicted that they won’t be able to pay off their student loans in their lifetime.
Despite bearing the burden of their own student loans, 36 percent of parents start saving for college when their child is at the age of five years or younger. However, on average, the efforts of the majority of the parents are still not enough to cover the full cost of tuition, as only 18 percent of parents reported that their contribution covered 81 to 100 percent of their child’s education costs.
Last month, Bernie Sanders introduced legislation that seeks to forgive more than $1.6 trillion in student debt held by 45 million people across the country. It would also make two and four-year public and tribal colleges and universities tuition-free and debt-free.