Majority of Families Save for Their Child's College Education, Less Than Half Ready for the First Tuition Bill, Finds College Ave Survey

Of parents who saved for college, average amount was $45,000, according to survey 

WILMINGTON, Del., June 4, 2024 /PRNewswire/ -- With high school graduation and celebrations in full swing, many families have their sights set on life's next big stage – college – and with it, the financial investment. While most parents (89%) agree that a college degree is important for their child's future, less than half (44%) felt ready to pay for the first tuition bill when their child graduated from high school, according to a recent College Ave survey of 1,000 parents of current college students.

Nearly all parents surveyed (93%) plan to help their child pay for college and will use a mix of methods, including parent income and savings (65%), grants and scholarships (62%), a 529 account (44%), federal student loans (42%), and child contributions (39%). Lesser used methods include parent loans (19%), a second job (17%), private student loans (16%), money from a retirement account (10%) and credit cards (10%).

Regarding savings, 3 out of 4 (75%) parents have set aside some savings for their child's college education. Of those parents, the average amount saved for their child's education was $45,000. And some – almost 3 out of 10 (28%) – plan to cover their child's full education costs out of money saved.

However, less than half (49%) of all parents had a plan to cover the full cost of college before their child enrolled in college. Perhaps this is why most parents find paying for college stressful (78%) and find the costs surprisingly higher than expected (71%). Around 2 out of 3 parents found room and board, and college tuition and fees more costly than they had anticipated. Even the child's personal expenses took close to 4 out of 10 parents by surprise.

"Year over year, our College Ave survey shows that parents strongly believe a college degree is integral to their child's future," said Angela Colatriano, Chief Marketing Office, College Ave. "The survey highlights how families complete the investment puzzle, from savings and income to scholarships and borrowing. Parents are committed to helping their child achieve life's next big goal – a college education."

For tips on how to prepare for upcoming college costs, Colatriano suggests:

• Fill out the Free Application for Federal Student Aid (FAFSA). This form is crucial to unlocking federal aid, including grants, scholarships, work-study and federal student loans. Many states and schools also use this form, so it's important to fill it out every year. Some aid is first come, first served, so make sure to fill it out as soon as it becomes available.
• Discuss strategies to reduce the overall cost of college. Make sure to think about the full cost of the college degree, not just the cost for one academic year. Around half of families (56%) expect their child to graduate within four years. Families also reported that their child will have a job in college (46%), considered only in-state public colleges (25%) and will live at home during college (10%) to save on college costs.
• Plan for the "pre-college" spend. Summer spending can add up for college-bound families. According to the survey, this includes electronics ($1,028 on average), travel and transportation ($638), dorm room essentials ($560) and new clothes ($380). Make a budget for the summer before college and stick to it.
• Prepare for "outside" college costs. Many parents also report contributing to additional costs – beyond college tuition and fees – including helping to pay for their child's phone bill (92%), health insurance (91%), child's auto insurance (78%) and even give their child a monthly monetary stipend (42%). Set realistic expectations on what you can or want to contribute, and make sure to communicate that to your child.
• Borrow smart. According to the survey, of those who plan on borrowing federal or private student loans, the families will borrow $46,000 on average to fund their degree. If you plan on using loans, borrow federal student loans in the student's name first, as those offer unique benefits – such as low interest rates and income-based repayment plans – not typically offered by private lenders. If you find you still have a gap to cover, consider College Ave. College Ave offers good rates, flexible repayment terms and great customer service. Use the College Ave student loan calculator to help estimate monthly payments.

For more resources and tips on how to plan and pay for college, visit: collegeave.com.

About College Ave
College Ave started with a big vision and a simple mission - take the stress out of paying for college so students can focus on preparing for a bright future. Now a leading financial services company, College Ave remains committed to using best-in-class technology and deep industry expertise to deliver practical and personal solutions that give young adults a running start on their roads to financial success. We offer best-in-class products with competitive rates and a customer-friendly experience from start to finish. Visit: www.collegeavestudentloans.com.

About the Survey
The College Ave survey was conducted by Barnes & Noble College Insights^™. The national online survey of parents of undergraduate students who attend a 4-year college or university at one of the campuses served by Barnes & Noble College had 1,000 respondents and was fielded in March 2024. Last year, Barnes & Noble College Insights conducted more than 50 research studies and 100+ survey polls of students, faculty and parents that interact with one of its more than 770+ campus bookstores across the nation.

SOURCE College Ave