Despite financial planning and saving strategies, almost half of families (46%) recently surveyed had a plan for how to cover the full cost of college. According to a recent College Ave survey of 1,000 parents of current college students, conducted by Barnes & Noble College Insights™, 27% reported their child attended a school outside their initial budget, and around two-thirds found the cost of tuition and fees (67%) and room and board (65%) higher than they anticipated.
The true cost of college becomes clear with the first tuition bill, however, and for nearly half of families surveyed (48%), borrowing is at least part of how they plan to pay it. Survey findings show that lending breaks down as follows:
– Federal Student Loans – 41%
– Parent Loans – 18%
– Private Student Loans – 16%
Those using federal or private student loans plan to borrow, on average, $40,225 to help pay for their child’s entire college education. Those using parent loans are willing to borrow, on average, $62,885.
Tips to make paying tuition less overwhelming
Whether it’s your first child’s freshman year, or you’re familiar with the process of paying for college, College Ave offers these tips and reminders when it comes to borrowing:
- Compare lenders. Take time to compare lenders. Look for competitive rates and flexible repayment plans that fit your family’s budget. Read reviews, ask for recommendations and make sure you’re choosing a lender you can feel good about.
- Use a student loan calculator. For those borrowing student or parent loans, less than two-thirds (60%) of parents reported they understood what the monthly repayment amount would be.
- Consider a cosigner. For private student loans, taking out a loan with a cosigner with good credit can help you qualify for a lower interest rate, potentially saving you thousands of dollars over the life of your loan.
- Don’t overlook the scholarship search. Half of families (50%) regret not spending more time researching and applying for scholarships, and many families forget that you can apply for scholarships throughout a college career, not just before freshman year.
Talk about cost-saving strategies with your student. One of the simplest ways to save money is to ensure your student is on track to graduate on time. Every additional semester can add thousands of dollars to the total cost of a college degree. Taking accelerated paths to graduation, like summer courses, can also be a great cost-saving strategy in the long run.
