Not only do older parents have to worry about how they will get themselves through retirement, but they also have to figure out how to pay for their children’s college educations.
A new survey from Sallie Mae found that while 75 percent of parents of this fall’s incoming freshman class were excited to send their child to college, 30 percent were anxious, 28 percent said they were nervous and 20 percent said they were stressed.
For 60 percent of parents, the most difficult aspect of sending a child to college is figuring out how to pay the costs of college. Nearly half had a pay-as-you-go attitude, with 31 percent expressing some concerns but feeling sure they would figure something out. Only one-third said they were ready to pay for college this fall. One-fifth expressed concerns or misgivings.
“Entering your freshman year in college is a significant transition for the entire family,” said Joe DePaulo, executive vice president, Sallie Mae. “Getting ready to hit the books also means final financial deadlines are arriving. The good news is there are smart options to help make ends meet.”
Sallie Mae recommends that students apply for federal aid; pay-as-you-go, as many colleges and universities offer interest-free tuition payment plans that spread payments out over a number of months rather than expecting tuition in one lump-sum payment at the beginning of the semester.
The organization also recommended that families safeguard their tuition investment by purchasing tuition insurance. It found in its research that 65 percent of students and parents were unaware of such an option. Sallie Mae offers a program that will reimburse up to 100 percent of the lost cost of attendance if a student has to withdraw from his studies for medical or mental-health-related reasons.
More than half of parents surveyed said they have had frequent conversations with their child about keeping up with academics. More than one-quarter of parents said they will contribute to college with no strings attached, but most parents have stipulations, such as maintaining a minimum GPA (40 percent), staying out of trouble (28 percent) or working while in school (19 percent).
Sallie Mae is a financial services company that specializes in education.