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Fidelity Study Finds Family Discussions about the Total Cost of College Critical to Understanding How to Manage Potential Student Loan Debt
Thursday, October 31, 2013 6:55 AM

While the number of families saving for college is at an all-time high (69 percent), many parents are missing an important step in the planning process – talking as a family about the “total cost of college.” According to Fidelity Investments7th annual College Savings Indicator study, 41 percent of families with college-bound children age 15+ have not yet had these critical discussions.

According to the study, among those parents who have taken the time to talk with their older teenagers (age 15+) about how college-related decisions may affect their future outlook, 69 percent report having made adjustments to their college plans. These adjustments have led to changes in financial behaviors to help address the rising cost of college:

  • 44 percent of parents explored additional funding options such as scholarships
  • 29 percent of parents opted to send their children to a less expensive school
  • 22 percent reported they will rely more heavily on financial aid when it comes time to send their child to school

The study also finds that 78 percent of parents don’t want to burden their children with hefty student loans, yet in many cases this may be unavoidable. Three-quarters (76 percent) of parents with children in college anticipate they will graduate with debt, averaging $27,800. For those anticipating debt, parents believe it will take nearly eight years to pay it back. Nineteen percent think it may take their children more than a decade to pay it back.

Additionally, the study finds that the use of dedicated college savings accounts, such as 529 college savings plans, continues to grow. Thirty-three percent of parents with children of all ages, report they are investing in a 529 college savings plan, up from 28 percent in 2012.

Helpful Resource: Credit Union Student Choice. A business partner of Credit Union Resources, Credit Union Student Choice offers a wealth of information for college bound students and their peers. And for credit unions interested in offering private student loans, Credit Union Student Choice is offering several free upcoming webinars:

Although the webinars are free, registration is required. By participating in these webinars, credit unions will learn how to:

  • Grow and diversify your loan portfolio
  • Build life-long relationships with Gen Y members
  • Enter the market easily and efficiently with our networked structure
  • Achieve optimum portfolio performance by employing proper risk mitigation tactics

To learn more about Resources’ business partner, Credit Union Student Choice, please visit www.studentchoice.org.