Each year Discover Student Loans conducts a survey to better understand what parents think about the college financing process. While the vast majority of parents believe college is important, the difficulty comes in finding how to pay for it. The results provide insights that can be helpful to parents of high school and college students:
• Who pays for college? While many parents say they expect to help pay for their child’s education, a surprising amount say that they expect their child will pay for all or most of it. This might come as quite a shock to some students. Parents and students need to have a serious discussion about expectations so there are no surprises when the tuition bills start arriving.
• How do we pay for college? Students and parents are advised to take advantage of “free” money, such as grants and scholarships, before turning to student loans. About half acknowledged that student loans will be a funding source for college costs, with over half of the parents being likely to help their children repay those loans. But students who will not receive this type of support are advised to think long and hard about the amount of student loans they take on, and to realistically look at their chances of making full repayment. Discover has an excellent ROI Calculator which compares the earning potential of various college degrees so you can determine which career field will provide compensation that will be substantial enough to repay the money you have borrowed.
• Fill out the FAFSA! Almost half of the survey respondents did not even fill out the FAFSA, completely negating any chance they might have had at obtaining financial aid from federal, state, institutional and private resources. Although it can be a bit intimidating, the FAFSA is the first and surest route to opening the gateway to financial aid. After that, it depends on your individual family and financial circumstances, and costs at the college you hope to attend. To encourage more families to apply for financial aid, Discover has developed a no-charge online FAFSA Assistant. Just using answers from a few questions, it helps families create a customized checklist for completing the FAFSA. The FAFSA for 2017-18 will be online beginning October 1, 2016. While you’re at Discover’s site, be sure to watch some of their helpful videos and enter their $2,500 Discover Student Loans Scholarship Award.
When borrowing money for college, take advantage of federal student loans first and then do your homework to compare offers from private student loan companies.
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