Parents Making Hard Choices to Save for Children’s College
Majority of American parents consider saving for their child’s education much harder than they anticipated, a new Student Loan Hero survey found.
Out of 500 parents who are currently saving for their college-bound children, nearly 79 percent said that it is more difficult to save than they had expected.
Many parents are even feeling guilty for not saving enough. Nearly 43 percent of respondents, especially mothers and those who didn’t get financial support from their own parents to pay for college, feel bad for not saving more to support their child’s education.
“These parents want to provide their children with the financial assistance they didn’t have but find it tough to keep up with today’s tuition rates,” the report says.
Parents are relying on different modes and methods to pay for their children’s college with savings accounts being the most common route followed by cash, savings bonds, and 529 Plans. And there are others who are ready to take out a personal loan, Parent PLUS loan, co-sign a loan in their child’s name or use a credit card to pay the tuition.
With a raging debate going around negative effects of student loan debt on the lives of graduates, half of the parents are even considering to cover a child’s college costs through their retirement savings.
“Parents seem very motivated to help their children pay for college and even repay their loans, but draining their retirement savings to do so could threaten their own financial well-being in the future,” the report noted.
A similar survey conducted by COUNTRY Financial had found that parents are willing to incur an average debt of $31,000 to cover the cost of their child’s college education, with six in 10 parents predicting that they will only be able to cover 60 percent or less.
Pertinently, most of the candidates seeking the Democratic presidential nomination are proposing either a debt-free or tuition-free college experience.