A new study says a combination of rising tuition and inflation is the root cause.
What Americans struggle to pay for today directly impacts their children’s future.
Financial service company Discover recently released a study of more than 1,000 parents with kids ages 16 to 18. More than 3 in 5 respondents say they’re worried about affording to send them to college. Those parents’ main concerns are rising tuition and the strain inflation has had on their savings – both valid reasons.
Two things have happened over the past four decades: Inflation has hit a record-high and college costs have climbed by 169 percent.
Here’s a breakdown of how the current economic outlook will shape the next generation of college students.
A pricey piece of paper
Researchers from Georgetown University analyzed BLS and National Center for Education data from 1980 to 2019. Costs have gone up by 169 percent.
The report also found the typical costs – with everything ranging from tuition, room and board to books and supplies – at a public in-state university are more than $27,000. That price tag jumps to just under $56,000 at a private college.
More than half (55 percent) of parents told Discover they have only $15,000 set aside for their kid’s education. Unfortunately, many will take on a personal financial burden. Here’s how they say they’ll pay:
- Student loans: 41%
- Dip into their own savings: 43%
- Scholarships: 54%
“As families are faced with rising costs, we encourage them to have conversations with their students about paying for college early on,” said Rich Finn, vice president of Discover Student Loans. “Searching for and applying for scholarships is a critical part of the college application process as they can help reduce the cost of college and do not need to be repaid.”
Find out: I’m 15. How Do I Save for College Now, So I Get the Most Out of My Financial Aid?
The trouble filing for free money
Not all, but many, merit-based scholarships require college students and their parents to file a Free Application for Federal Student Aid (FAFSA). It’s a notoriously difficult form and Debt.com’s own research shows it’s progressively gotten tougher to follow the federal government’s instructions.
In a national poll of students and parents, more than half (53 percent) of respondents said the biggest challenge they have is “knowing all the financial information FAFSA is asking for, which is a 9 percent increase over last year.”
The federal government has promised to simplify the form by trimming it down from 108 to 36 questions. To date, only two have been cut down.
The free college aid would benefit families stressed over rising tuition and inflation. With FAFSA changes in the works, Debt.com’s president Don Silvestri is still optimistic that parents and students will soon have at least some relief with college expenses.
“I still expect some harried parents to miss key instructions, but overall, we should see a significant improvement,” Silvestri says. “These changes should really help.”
Find out: Survey Shows Why FAFSA Needs to Be Simplified
Published by Debt.com, LLC