A new survey indicates more future college students plan to take out loans for their education and their parents are more willing to help them with the costs.
Fifty-five percent of parents surveyed said their child is planning to use student loans to pay for their education, an increase from 50% in 2012, according to results from Discover Student Loans’ fifth annual survey on trends in student loans.
The percent of parents who are willing to help their children with student, or other types of loans, to pay for college is also rising. Overall, 78% of parents expect to help their child pay for college while 75% are very or somewhat worried about having enough money to do so, according to the survey. Also, 61% of parents surveyed said they are very or somewhat likely to help their child pay back their loans, compared to 55% in 2012.
Discover Student Loans surveyed 1,000 adults with children ages 16-18 who are planning to attend college.
Most parents, when asked how much of their child’s education they could afford, said it would be up to 25% while the percentage who said they could afford all of it increased slightly from 9% in 2015 to 11% this year, according to the survey. Thirty-two percent of parents said student loans will cover the cost of their child’s education, followed by 27% who said they will use family savings.
"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. The cost of college is an important factor when deciding on a school and 43% of parents responded that they are limiting their child’s college choice based on price, according to the survey. "Interestingly, this number has decreased since last year, when nearly half, 48% said price was limiting the choice of college,” the survey results stated.Thirty-one percent of parents said it would be more cost effective for their child to attend a public university instead of a private university; 30% saw public universities as a more cost-effective alternative to community college. Parents are evenly split, with 42% saying yes and no, that they would be more likely to help pay for their child’s education if they major in a field that would help them find a job, according to the survey.
Overall, parents are slightly less worried that their children’s student loan debt will impact their ability to purchase a car or house after graduation. Fifty percent of parents said they are very worried about the impact of student loan debt on their children’s financial future, compared to 55% and 58% in 2014 and 2015, respectively, according to the survey.