Rising education costs are weighing heavily on parents who want their children to attend college but feel financially unprepared to handle tuition and expenses. According to a national survey by Collegiate Funding Services (Nasdaq:CFSI), 65% of parents expected their children to pursue a college education at a four-year college, yet 44% felt they were not really prepared to pay for that education.
"Parents are beginning to feel that sending their child to college is no longer an option they can afford," said J. Barry Morrow, CEO of Collegiate Funding Services. "In fact, our survey indicated that more than a half a million households feel that the rising cost of tuition would contribute to their decision to forego a four-year college education all together."
Middle class parents -- those with household incomes of between $25,000 and $74,999 -- were notably unready to pay their teenager's college education. Fifty-six percent of this group said they were not prepared, the survey revealed.
The survey also showed that more than one-third of parents, or 2.7 million households, understood very little about the different financial options that exist for parents to help pay for the costs of college. Middle class parents (as defined above) had the least understanding. For example, 43% of middle-income parents said they had little or no understanding of their financial options as compared to 24% percent of parents with household incomes under $25,000 and 29% of parents with household incomes of $75,000 and above.
Perhaps lack of awareness of the many different financial aid resources available to help pay for college is why 16% of parents (or 900,000 households) who will send their children to college plan on dipping into their retirement savings, and 7% (or 400,000 households) plan on using credit cards to finance, or help to finance, their child's college education -- both squarely against the sound advice of many financial experts.
"The dream of attending college seems to be alive and well, but it is distressing to see the growing number of parents who feel that college attendance is unattainable for their sons and daughters. The unfortunate reasons are a widespread misinformation about college cost and the financial aid process, which is prevalent in every community," said Ronald W. Johnson, Director of Financial Aid at UCLA. "School financial aid offices are an excellent source of information, but we need to look for broader avenues of credible communication to make certain that education finance tools and resources get into the hands of every parent and teenager as early as possible to help them make critical higher education finance decisions."
This article does not have to be you. You can contact College Planning Services today by completing the form HERE online and find out what can be done to assist you. We have an array of options to help families that desire to send their children to college.