The third annual survey from Discover Student Loans reveals that while 96% of parents still see the value of a college education, 85% are very or somewhat worried that student loan debt will affect their childs ability to buy a home, car or other large purchase after college.
Although parents are concerned about student loan debt, they appear less likely to include the price of a university in the decision-making process.
Forty-eight percent of parents said that cost would not be a factor when choosing a college, an 8% increase from 2013. Forty-four percent of parents said they were planning to limit college choices based on price and 9% were not sure, both decreases from the previous year.
"It is promising to see families recognize the investment in a college education and are considering their childrens long-term financial health beyond graduation," said Danny Ray, president of Discover Student Loans. "We hope that this annual survey brings to light the need for families to review all of their options when going to college. We encourage students to always use free money first when financing a college education and then, if needed, determine what lending options work best for their needs."
Parents Still Worry about Cost
Seventy-seven percent of parents said they plan to help their child pay for college, a slight decrease from 81% in 2013. Sixteen percent of families dont plan on contributing anything.
While families want to help pay for college, parents routinely said they are worried about having enough money. Throughout the last three years, numbers have remained fairly consistent with three out of four families saying they are very or somewhat worried about having enough money to cover college costs. A quarter of parents are not very or not at all worried about having enough money.
Parents also are not limiting their financial support based on what course of study their child chooses. More than half of parents, 53%, said choice of major and earning potential played no part in their decision to fund their childs education, while 33% of parents plan to limit funding based on their childs major.
Parents Shift Repayment to Students
The number of parents who say their child should pay for most or all of their college education has increased for the past three years. In 2014, 15% of parents responded saying their children should pay for the entire cost of college, compared to 12% in 2012. Thirty-two percent of parents think their child should pay for most of their schooling, compared to 27% in 2012.
Parents also are split on whether they will assist their child with repayment. Only 52% say they are likely to help their child repay loans, with 24% saying very likely and 28% say somewhat likely, compared to 58% in 2013.
When asked about student loans, 52% of parents said their child plans to take out student loans to pay for college, with 48% planning to use both federal and private student loans.
As students prepare to enter college this fall, its important for parents to have clear and honest discussions with their children about how theyll pay for college, Ray said. Students need to understand the financial responsibilities they take on and, more importantly, who is responsible for repayment of loans upon graduation.
About the Survey
The Discover national survey of 1,000 adults who have children 16 to 18 years old who are planning to attend college was conducted May 15-20, 2014, by Rasmussen Reports, an independent survey research firm (http://www.rasmussenreports.com ). The margin of sampling error was +/-3 percentage points with a 95% level of confidence.