18 Jul Information Parents Need About Paying for College
Discover Student Loans recently released some very interesting results as part of their sixth annual national survey. The findings shed light on the college financing process from the perspective of parents with children planning to go to college.
Overall, 83 percent of respondents believe that college is very important to their child’s future. In deciding which school their child might attend, 50 percent felt that the academic program was the most important factor, while 31 percent stated that cost was.
While working with families as a financial aid advisor, I often discuss the very same issues queried in the survey. My experience is that the survey is an accurate reflection of what is happening with families as they grapple with the issue of paying for college. The three areas where I notice the most similarities are in the importance of academics in the college decision, the motivation to complete the Free Application for Federal Student Aid (FAFSA), and the use of student loans as part of the college payment package.
In my meetings, I strongly encourage families to complete the FAFSA to determine their financial aid eligibility. The survey indicated that almost half of the respondents did not even submit an application at all. Perhaps they are second-guessing themselves as to whether they qualify for help, but I assure families that it is well worth the effort, as most students do qualify for some type of aid.
Most surprising to me is that people feel less knowledgeable about the entire cost of a college education, despite the fact that so much information is available. With everything that can be learned online from universities, outside sources, and college financial aid advisors, families need to increase their knowledge significantly so they can make informed decisions.
When asked if their student planned to use student loans to help pay for college, almost half said yes, while only 28 percent said they were very knowledgeable about the differences between federal and private student loans.
Although 74 percent of the parents responded that they intend to help their child pay for college, they are very concerned about their ability to pay for all of it. Most felt they could reasonably cover between 25 percent and 50 percent. This is incredibly important information to share with your student so you can make value decisions as a family. I believe it is crucial for families to make informed choices when borrowing money to pay for college. Review the federal student loan website carefully, and then study websites for private student loan lenders like Discover Student Loans, to make informed decisions about interest rates and payment terms.
If you have concerns about your child’s financial future, start talking about money early in the high school years. I recommend that parents have conversations as early as the junior year in high school to help students manage expectations about college costs.
The best advice is to start talking about paying for college early, file the FAFSA and educate yourself about your options.
Jodi Okun is a Discover Student Loans brand ambassador.