Financing Education

Students Taking More Responsibility To Plan And Pay For College, Looking For New Financing Approaches

Over 70% of students say the majority cost of college is their responsibility

SAN DIEGO, May 1, 2019 /PRNewswire/ — According to a new study from Ascent Funding, high school seniors headed to college and current college students are taking on greater responsibility for covering the cost of their college education. Representing significant growth from the company’s 2018 study, 72% of current college students (versus only 59% in 2018) believe 50% to 100% of tuition and the overall cost of college should be the student’s responsibility – and 60% of parents of college students agree. High school seniors express the same sentiment as their older peers with 72% of high school seniors believing they should shoulder 50% to 100% of their college costs; however, with only half (53%) of parents of high school seniors saying the same, students are seeking more financial responsibility than even parents expect.

At the same time, findings show that while the cost of a college education is a major underlying source of concern for all groups surveyed, graduating high school students and their parents may be overly confident in their level of preparedness. According to the survey, 65% of college parents admitted to underestimating the total cost of their child’s education.

The findings are part of the second annual Ascent study, Perceptions & Realities of Paying for College, which analyzes Americans’ behavior and sentiment around paying for college. This year’s survey compares high school seniors expected to graduate in 2019 against current college students age 18-26 years old, and respective parent groups, to uncover how each group is approaching college planning and financing, and how those perspectives change once the college experience begins.

Insights between perception and reality of paying for college

“This second annual study identifies significant insights between the perception and reality of paying for a college education, which helps us better understand the problems facing students and identify better finance solutions for students,” said Ken Ruggiero, Chairman and Chief Executive Officer of Ascent Funding. “We’re applying these insights to our outcomes-based lending approach, rooted in helping students understand the cost of their educational choices relative to their potential future income. With more tools launching later this year, we’re striving to give students the information they need to make more confident decisions and manage their debt load more effectively before and after they graduate.”

While high school seniors and parents of high school seniors think they have a solid grasp on the total cost of a college education, along with a plan to approach financing, it’s clear more education is needed. Among the upcoming group of incoming college freshman:

  • An overwhelming majority (92%) of high school seniors headed to college are concerned about their ability to pay for it and try to approach preparation responsibly.
  • They’re doing so by taking the lead on filling out admission applications themselves (84%), and serving as the final decision maker on selecting a college (80%). Among parents of high school seniors, 74% agree that their student is indeed taking on this responsibility.
  • While 90% of high school seniors state they are moderately to extremely knowledgeable about all the financing options for college, nearly one third (32%) either do not plan to or aren’t yet sure if they’ll fill out a Free Application for Federal Student Aid (FAFSA®).
  • Only 44% of high school seniors plan to apply for merit-based aid or scholarships to pay for college.
  • Over half of high school seniors (56%) are already planning to work specifically to pay for the cost of their education, adding distractions to their studies prior to even being on campus and settling in to college life.

According to current college students surveyed, what’s happening on college campuses is even more surprising:

  • In the past year, 24% of current college students reported they have not received a student loan disbursement from their college on time to cover initial school-related costs.
  • While waiting for the loan disbursement from their college, 51% of students went without food and 49% without school supplies, likely making it more difficult to focus on their studies.
  • Nearly half of the college students affected had to pull from their personal savings accounts (46%), while 43% had to ask family or friends to help cover their costs.

All students and parents surveyed indicated an openness for new, creative options to finance a college education:

while the cost of a college education is a major underlying source of concern for all groups surveyed, graduating high school students and their parents may be overly confident in their level of preparedness...

  • 62% of high school senior and parent respondents combined indicated somewhat to much more confidence in their ability to repay borrowed money if their future payment was able to fluctuate based on income, instead of a fixed monthly amount offered through current loan agreements.
  • College survey respondents (students and parents combined) have even more confidence in this type of repayment option with 66% collectively indicating somewhat to much more confidence in their ability to repay borrowed money.
  • When asked about student loan options that don’t involve a cosigner, 79% of college parents would support their child obtaining a loan on their own; 54% of college students would consider obtaining a loan on their own.

About the Survey and Methodology

The Perceptions and Realities of Paying for College study shares data gathered from two online surveys:

High School Survey
Allison+Partners Research + Insights surveyed 1,015 individuals, a mix of high school seniors expected to graduate in 2019 and parents of high school seniors expected to graduate in 2019, all residing within the United States. The survey was fielded using the Qualtrics Insight Platform, and panel was sourced from Fulcrum by Lucid. Fielding was executed in March 2019.

College Survey
Allison+Partners Research + Insights surveyed 1,099 individuals, a mix of college students (18-26 years old) and parents of college students who have taken out student loans and all residing within the United States. The survey was fielded using the Qualtrics Insight Platform, and panel was sourced from Lucid. Fielding was executed in March 2019.

 

 

About Ascent Funding
Ascent is built around one guiding principle: Student loans should expand possibilities, not limit them. That’s why Ascent created a new private student loan model that gives students more opportunities to qualify for a loan, with or without a cosigner, to get the funding needed to cover tuition and living expenses. For eligible juniors, seniors and graduate students without a cosigner, Ascent utilizes broader credit tiers and considers creditworthiness, school, graduation date, major, cost of attendance and other factors. Ascent encourages transparency and financial wellness by incorporating financial literacy into the application process, preserving the notion that an education is an investment where students and families should understand the return on their investment relative to the cost. Ascent also offers benefits and resources that set students and families up for financial success.
To learn more about Ascent student loan options and benefits, please visit AscentStudentLoans.com.