Consumer Lending

Parents concerned about impact of student loan debt on children

Education Money Student LoanA survey from Discover Student Loans recentlyshowed that while most parents consider a college education to be valuable, many are concerned about the impact of student loan debt on their children’s future.

According to the third annual survey, 85 percent of parents are worried or somewhat worried that student loan debt will affect the ability of their children to purchase a home or car.

Student loan debt, the only form of debt that has grown since the height of the financial crisis in 2008, stands at approximately $1 trillion, according to the CFPB.

While parents are concerned about the impact of student loan debt, they are less likely to factor in the price of a college in the decision-making process—approximately half of all parents said cost would not be a factor when choosing a university, an eight percent increase from 2013, while 40 percent planned to limit choices based on price.

“It is promising to see families recognize the investment in a college education and are considering their children’s long-term financial health beyond graduation,” Danny Ray, the president of Discover Student Loans, said. “We hope that this annual survey brings to light the need for families to review all of their options when going to college.”

Approximately 80 percent of parents said they planned to help their children pay for college, down slightly from 81 percent in 2013, while 16 percent do not plan to assist in paying for school.

The number of parents who think their children should pay for most or all of their college education has risen each year for the past three years. Over the past year, 15 percent of parents said their children should pay for all of their education, compared to 12 percent in 2012.

Additionally, only 52 percent of parents said they planned to help their child repay loans, compared to 58 percent last year. One in four parents said they were very likely to help repay student loans, and 28 percent said they were somewhat likely to help repay loans.

The study polled 1,000 U.S. adults who have children between the ages of 16 and 18 who plan to attend college.

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