#United States #Wilmington #College Ave #student loans #Education Costs

Families underestimate college expenses

A recent survey conducted by College Ave, a prominent financial services company, has brought to light a concerning trend among families preparing for higher education. According to the survey, families with high school seniors are underestimating college costs by an average of $14,137 per year, leading to a staggering total of $56,000 over a typical four-year degree. This miscalculation presents a significant 'expectation gap' as students ready themselves for the financial burdens of college life.

The Survey Results

The College Ave survey, which polled 1,061 four-year college students via Barnes & Noble College Insights, indicated that more than half of the respondents (51%) found college expenses to be higher than they initially anticipated. Despite these surprising figures, a noteworthy 85% of students maintain that earning a degree is crucial for their future. Additionally, a large portion of students (68%) believes their institution is committed to supporting them in building successful post-college careers, and 67% are actively taking steps to create professional connections and securing internships.

Parental Influence on Financial Decisions

The role of parents in students' financial education cannot be overstated. More than 78% of students named their family as their most trusted source for financial guidance, far outpacing high school or college classes (65%), friends (41%), and even social media (9%). This illustrates the crucial influence parents have in helping students navigate their financial planning as they approach college.

Joe DePaulo, CEO and Co-Founder of College Ave, emphasized the significant role parents play in both supporting college costs and aiding students in grasping essential personal finance skills, including understanding student loans. This guidance could greatly benefit students as they embark on this new chapter of life.

Hidden Costs of College

While tuition and fees constitute the most considerable part of college expenses, other costs can often catch families off guard. These include:

• - Books and supplies: 58% of students cited these as unexpectedly high costs.
• - Tuition and fees: 57% noted these expenses exceeded their expectations.
• - Housing: 45% of students were surprised at how much they spent.
• - Dining and activities: 29% reported unexpected expenses related to dining and off-campus activities.
• - Extracurricular activities: 15% mentioned clubs and organizations costing more than anticipated.

For students living in on- or off-campus housing, the average monthly rent is about $1,501. Furthermore, many parents are supplementing these expenses by contributing to basic costs such as phone bills (64%), health insurance (53%), groceries (52%), and even housing/rent (49%).

Understanding Borrowing and Student Loans

When it comes to financing their education, nearly 46% of students plan to fund their college through federal student loans, while 12% intend to rely on private loans. Students expecting to borrow anticipate an average total of approximately $38,775 for their education.

However, there appears to be a significant knowledge gap. Although 85% of students express a desire to improve their financial literacy, many lack confidence in critical areas, with only 40% feeling knowledgeable about student loans and 39% regarding interest rates. Alarmingly, more than half (56%) made borrowing decisions with minimal or no parental consultation.

As they prepare for life beyond college, about 62% of students expressed concern that their monthly loan payments might take up more of their budget than expected. These revelations underscore the importance of financial discussions between parents and students regarding college-related debt and budgeting.

The Path Ahead with College Ave

In response to these findings, College Ave emphasizes the importance of resources and tools designed to assist families in preparing for the financial commitments of higher education. Their offerings include articles on financing education and tools like student loan calculators, which can help families forecast the total loan costs and monthly payments.

For those looking for additional support, College Ave's private and parent loans provide an avenue for covering up to 100% of college expenses. With a mission to alleviate the stress associated with financing college, College Ave strives to empower students to focus on their educational objectives while planning effectively for their financial futures.

For further insights and resources, visit CollegeAve.com.