Many American families have no plan to pay for their children’s college educations – even though they realize that a degree is valuable in helping graduates earn a living.
That is a highlight of the 2012 Sallie Mae national study, “How America Pays for College,” presented at the Nov. 1 installment of the GWSB fall Financial Literacy Seminar Series. The study of 800 students, ages 18-24, and their parents focused on how they pay for college as well as how they feel about that investment.
The findings were presented by Sarah Ducich, senior vice president for public policy at Sallie Mae, one of the nation’s largest providers of student loans.
Ducich said unemployment rates show that college pays off; about 18 percent of adults ages 20 to 24 with a high school degree or less were unemployed this year – three times the number for those with a bachelor’s degree or higher.
“This is one of the true testaments of the value of college: you are able to get a job,” she said.
And, in the Sallie Mae study, 98 percent of respondents “agreed” or “strongly agreed” that college is an investment in the future. Families are also figuring out ways to cut costs, even though tuitions are going up, by picking less expensive four-year schools or two-year schools or having their children live at home while attending college.
Still, Ducich said, people aren’t doing enough to plan on how to cover college costs. Students typically pay for college from a combination of sources, including parent and student borrowing; grants and scholarships; student and parent income and savings; and income from relatives and/or friends.
In 2012, just 39 percent of families of all incomes had a plan to pay for four years of college, the study showed. That percentage, though it climbs to 47 percent for middle-income families, and 57 percent for higher-income families, leaves plenty of folks without a plan, Ducich said.
“One of the challenges is how to get families and students early on in the process of financial literacy to think about how they are going to pay for college,” said Ducich. “How can we be successful in making such an important investment?”
For more on Ducich’s presentation, go here.
Posted by gwsb on November 6, 2012 | Filed under: GWSB News.