July 12, 2023
Unsure How to Pay for College? You’re Not Alone – New Study from College Ave Finds Less Than Half of Families Feel Ready the Summer Before College
Parents using savings and income has increased by 7% over 2022, and now ranks as the top method families use to pay for college
Paying for college ranks as the top financial goal for most parents (78%), ahead of retirement (64%) and building an emergency fund (43%)
(Wilmington, DEL) July 12, 2023 — If your family is spending the summer discussing how to cover college costs, you’re not alone – a recent College Ave Student Loans survey of 1,001 parents of current college students conducted by Barnes & Noble InsightsTM found less than half (44%) felt ready to pay those costs the summer before their child’s freshman year. And it’s easy to see why families are invested in the conversation and getting it right – nearly 9 out of 10 parents (88%) agree – a college education is crucial for their child’s future.
Most parents (93%) plan to help pay for some, if not all, of their child’s college education. Families of college-aged kids rank “paying for college” as their top financial goal (78%), ahead of saving for retirement (64%) and building an emergency fund (43%). Perhaps, this is why many parents report prioritizing funding a college degree over putting money in savings (67%), investing (40%) and retirement (35%).
“For college-bound families, adding in the cost of college to a household budget – especially when some of those costs may be unknown – can be confusing if not stressful,” said Joe DePaulo, Co-Founder and CEO of College Ave Student Loans. “Despite the many financial priorities parents are juggling for college as well as everyday expenses and goals, our survey finds parents are deeply committed to investing in their child’s education and future.”
Financing Options for College
As families with college-bound kids strategize the best way to balance their budget and fund a higher education degree, the College Ave survey offers insights on the top paying-for-college methods used:
- Parent savings and income: According to the survey, of those parents who are helping to pay for college, 66% report savings and income as the top method – an increase of 7% over 2022. Of those, more than half (55%) plan to use anywhere from $5,000-$30,000 from their own personal savings or income. Make sure to budget for potential rising costs. More than half of all parents surveyed said food (93% agree), transportation (81%), entertainment (59%), health insurance (53%) and housing (51%) have increased since their child has been in college.
- Grants and scholarships: Of those parents planning to help cover college costs, nearly two-thirds (61%) will use grants and scholarships, a decline of 5% compared to 2022. Close to half (45%) of those surveyed wished they had spent more time researching and applying for scholarships. An easy one to apply for is the College Ave $1,000 scholarship monthly sweepstakes.
- Student loans: Of all families surveyed, 44% plan to borrow student loans. If you are one of them, make sure to borrow federal student loans in the student’s name first as those offer unique benefits and protections only available on federal student loans. If there’s still a gap to cover, private student loans, like those offered by College Ave, are one option. Shop around for rates and repayment terms that fit your monthly budget. A good place to start is with a student loan calculator.
- Jobs: Of those parents who will help pay for college, close to one-third (30%) said their child will work to help with college expenses. Having some financial responsibility in their education can help your children take their courses more seriously, encouraging them to graduate on time. In addition, nearly 1 in 5 (18%) parents said they plan to take on a side hustle or work a second job to help cover extra college expenses. For parents, a second job not only offers more financial flexibility; it can also be an opportunity to get paid doing something you like.
- Parent loans: Of those parents paying for college, 17% are willing and want to take on the full responsibility of borrowing a college loan. For parent loans, make sure to compare federal versus private. If you have good credit, private parent loans may save you money – offering a lower rate for qualified borrowers and no origination fees.
As families prepare to add one of life’s biggest investments to their budget, make sure to review all of your paying-for-college options – and be prepared for the unexpected. Three out of four parents (75%) said college costs were surprisingly high. Of those costs, tuition and fees were more than parents had anticipated (75% agree), along with room and board (72%), child’s personal expenses (43%), school and activity fees (41%) and books and supplies (40%).
For college-bound families preparing for the upcoming school year, financing higher education will likely include some financial prioritizing, budgeting for the unexpected and using a mix of paying-for college methods to help your child on their path to a bright future. For more resources and tips on how to plan and pay for college, visit: collegeavestudentloans.com/blog.
About College Ave Student Loans
College Ave Student Loans started with a big vision and a simple mission – take the stress out of paying for college so students can focus on preparing for a bright future. Now a leading fintech lending company, College Ave remains committed to using best-in-class technology and deep industry expertise to deliver practical and personal solutions that give young adults a running start on their roads to financial success. We offer best in class products with competitive rates and a customer-friendly experience from start to finish. Visit: www.collegeavestudentloans.com.
About the Survey
The College Ave Student Loans survey was conducted by Barnes & Noble College InsightsTM. The national online survey of parents of undergraduate students who attend a 4-year college or university at one of the campuses served by Barnes & Noble College had 1,001 respondents and was fielded in May 2023. Last year, Barnes & Noble College Insights conducted more than 50 research studies and 100+ survey polls of students, faculty and parents that interact with one of its more than 770+ campus bookstores across the nation.