For many families tackling upcoming college costs this fall, borrowing student and parent loans is an important piece of their financing strategy. 55% of families will use student loans, according to a recent national College Ave Student Loans survey of 1,045 parents conducted by Barnes & Noble College Insight. Of those who expect their child to borrow, 53% anticipate they will take on between $10,000 to $40,000 worth of loans.
Parents who financially contribute to their child’s college education overwhelmingly agree (85%) that obtaining a college degree is more important than ever. Perhaps this is why many of the parents surveyed are also willing to take on the full responsibility of borrowing for their child’s education. 28% expect to borrow a parent loan. The data on how much was split – 23% plan to borrow anywhere from $10,000 to $25,000 while just as many plan to borrow $75,000 or more to help their child pursue their college degree.
While 53% of parents saving for college were comfortable with their savings plan, overall, the cost of college was still higher than many anticipated. 72% of families were surprised by the total cost. For 34% of families, the cost of college fell outside of their original budget. To help manage the extra expenses, 48% took on student loans to cover the gap while 30% relied on parent loans.
“Like other major investments we make in our lifetime, paying for college can come with additional costs that may not have been anticipated or have changed since the initial planning stages,” said Joe DePaulo, Co-Founder and CEO of College Ave Student Loans. “As the survey indicates, student and parent loans are an important source of funding for families who need immediate financing to cover education costs. With student or parent loans from College Ave Student Loans, families can stress less about financing and focus on their child’s bright future ahead.”
When shopping for student or parent loans, College Ave Student Loans offers the following tips:
- Borrow federal student loans in the student’s name first as these come with benefits and protections not typically offered by private lenders. To access these, fill out the Free Application for Federal Student Aid (FAFSA). Federal student loans do have borrowing limits, which is where private student or parent loans can help cover the gap.
- Find a trusted lender to help you cover college expenses. As the survey pointed out, the average family will need to borrow more than $10,000 in student loans and it’s important to borrow these funds from a trusted, reliable lender
- Understand rates, repayment terms, and fees and how they affect the total cost of your loan. Some lenders may offer a lower interest rate if the repayment term is shorter or if you make payments while in school.
- Repaying while in school can reduce the cost of the loan. Paying back as little as $25 a month can help save money over the total cost of the loan.
Edited by Maryssa Gordon, Senior Editor, Price of Business Digital Network