Students Feel More Financial Responsibility for Their College Costs Than Their Parents Think
MINNEAPOLIS, Oct. 9, 2017 /PRNewswire-USNewswire/ — Young people are often stereotyped as entitled, but surprisingly most students feel they bear the burden of paying for college.
According to the State of Student Debt in America™ 2017 report conducted for Thrivent Student Loan Resources, the majority of college students (68%) agree they should be the ones paying for all or most of their college education. Additional key themes emerged from the survey:
Although a majority of students agree they are responsible for paying for college, many are not prepared to do so.
Most students still expect to spend excessively on maintaining a high-quality lifestyle during the college years.
A majority of students and parents wish they spoke about college costs more often and feel financial stress much more than earning good grades or performing well on ACT/SAT.
Both students and parents agree that working around 20 hours a week should be expected as a way to pay for college.
Parents and students unprepared for college costs
Students may individually feel the onus is on them to pay for college because their parents are unprepared. In fact, nearly 1 in 3 parents (30 percent) surveyed didn’t save anything for their child’s college education, and 34 percent only started saving five or fewer years before their child started school. Students are nearly on the same page as their parents, as about a quarter (26 percent) of students who expect to rely, or are currently relying on their family to pay for college, think their family didn’t save for their education.
“When families have a plan to pay for college, they save more and students borrow less to complete their degrees,” said Susan Farrell, vice president at Thrivent Student Loan Resources. “Making a plan to pay for college is the first thing we encourage families to do when they start thinking about college for their kids. We’ve found that families save three times more when they have a plan for college as opposed to those who don’t.”
Students confident they are prepared to manage costs, but are they?
Moreover, 62 percent of college students feel confident they are fully prepared to manage the cost of college. While this may sound encouraging, the data actually suggests students might be under-estimating what it truly takes to tackle the financial demands of college. As an example: parents are more aware of the fine print that comes with financial aid paperwork than the students who will own those loan payments. In fact, fewer than 1 in 4 (23 percent) students have read more than 75 percent of their student loan documents, while half of parents (50 percent) have read more than 75 percent.
“These findings validate what many of us have been saying about financing a college education,” said Adam Carroll, national thought-leader on college funding and co-creative producer of the film on student debt, Broke, Busted & Disgusted. “Students and parents need to start talking early and often about preparing and paying for college. Young people need to hear their options over and over — this is not just a ‘one and done’ conversation.”
Communication is key to easing stress about paying for college
The stress faced by students is shared by their parents. Nearly 3 in 5 (57 percent) students who don’t plan to rely exclusively on scholarships or grants feel more stressed about paying for college than their parents, while more than half of parents (51 percent) feel they’re more stressed than their children.
Opening the lines of communication is key to reducing stress and ensuring students really are prepared for the realities of college costs. And students desire that dialogue to happen regularly. The survey found the majority of students (70 percent) wish their families spoke with them about college costs more often.
So, who bears the responsibility of having those awkward-but-necessary talks about paying for college? The answer is up for debate: 80 percent of parents feel it’s their or other family members’ job to teach kids about managing the cost of college, compared to only 51 percent of students who feel this way.
Many students unaware of scholarship opportunities
Many students don’t realize that scholarships are available beyond just pre-enrollment years. When asked when college students should apply for scholarships, 83 percent of students felt they should do so before beginning their freshman year. Yet, only 32 percent felt students should apply for scholarships during their senior year, only 39 percent in junior year, 41 percent during sophomore year and 44 percent during freshman year.
Parents and students agree: students should work while in college
Both students and their parents agree that students should work while in school. However, students feel stronger about this than parents do. In fact, 78 percent of students, compared to 70 percent of parents, believe students should have jobs during college to help cover the costs.
On average, parents and students are aligned on how much a student should work – with each feeling students should work an average of 19 hours a week while in school to help pay for their education.
Students expect quality of life in college to be the same as before college
Students also need to come to grips with the fact their quality of life may need to change during college. The majority of students (63 percent) believe their quality of life in college should be the same as it was before college. While it’s not impossible for students to have it all and contribute, they will need a sound savings plan to support their optimistic outlook for college.
Most students who plan to establish a college budget have accounted for, or plan to account for, must-have items such as textbooks (82 percent) and transportation (59 percent). But they’ll need help prioritizing the non-essentials, as only than a third (34 percent) are accounting for and budgeting for entertainment and 18 percent for vacations, such as spring break. Students may have unrealistic expectations when it comes to maintaining the same quality of life before college – and this is evidenced by the fact that the majority are not developing comprehensive budgets.
Thrivent Student Loan Resources, through an initiative called “It’s Time for New School Lending,” helps students with resources and tips get back to living like students, making more wise money choices while attending college, so debt is minimized and paid off quicker following graduation. They are also providing the movie Broke, Busted, and Disgusted for free online to students and parents to help start a conversation and provide ideas on preparing and paying for college.
More information about the survey results can be found here. To learn more about how to finance your or your child’s college education or to request the Broke, Busted, and Disgusted movie, please visit the Thrivent Student Loan Resources website at www.thriventstudentloanresources.com.
Note About Methodology
Thrivent Student Loan Resources’ 2017 State of Student Debt in America report was conducted by Wakefield Research among 1,000 students – with quotas set for 500 rising college freshmen and 500 college students, sophomores or higher – and among 500 parents of current college students or rising college freshmen between July 31 and August 9, 2017, using an email invitation and an online survey.
Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 3.1 percentage points for the student sample and 4.4 percentage points for the parents sample from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
About Thrivent Student Loan Resources
Thrivent Student Loan Resources is dedicated to helping college-bound students and their families take steps toward a healthier relationship with money as they plan for their future, pay for college, and prepare for life after graduation. Regardless of where someone is on their education journey, Thrivent Student Loan Resources is committed to providing families with comprehensive guidance – including resources, tools and products – in a way that is approachable and actionable. The organization believes private loans are the final part of the equation to pay for college and should be taken after careful consideration and with a plan to pay them off as quickly as possible after graduation. Thrivent Student Loan Resources is part of Thrivent Financial, a not-for-profit membership organization whose mission is to help Christians make financial decisions that reflect their values. For more information, visit Thriventstudentloanresources.com. You can also find us on Facebook.
Thrivent is a not-for-profit membership organization that helps Christians be wise with money and live generously. It offers its more than 2 million member-owners a broad range of products, services and guidance nationwide. For more than a century it has helped members make wise money choices that reflect their values while providing them opportunities to demonstrate their generosity where they live, work and worship. For more information, visit Thrivent.com. You can also find us on Facebook and Twitter.
About Wakefield Research
Wakefield Research (www.wakefieldresearch.com) is a leading, independent provider of quantitative, qualitative, and hybrid market research. Wakefield Research supports the world’s most prominent brands and agencies, including 50 of the Fortune 100, in 70 countries.