About two-thirds, or 68%, of parents of students heading to college now say they are more worried about paying for their child’s college education in the wake of the pandemic, according to a report from Discover Student Loans. The survey interviewed 1,500 parents of college-bound teenagers in early March and again in May.
“As you’d expect, the pandemic has put a strain on families’ finances,” said Manny Chagas, vice president of student loans at Discover.
A separate survey by NitroCollege.com of high school students entering college in the fall also found that 69% of parents and 55% of students said Covid-19 impacted their ability to pay for their studies.
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“I’ve never seen such anxious students and parents at this time of year,” said Eric Greenberg, president of Greenberg Educational Group, a New York-based consulting firm. “We have a lot of families talking about starting at community colleges or public schools or taking a gap year.”
More than half of parents, or 53%, said their child’s higher education plans had changed due to Covid-19, Discover also found. By necessity, some students will attend a school closer to home, delay entry to university or choose a cheaper one public rather than private college.
In addition, families will have to dip into their savings and depend more than before on financial assistance.
Fifty-five per cent of parents said they were worried their child would not receive enough scholarships – a jump of 14% from the same survey in early March – and 54% of parents said they will have to use their savings to pay for their child’s expenses. college education, compared to 47% before the pandemic.
Already, nearly 40% of parents have taken from their child’s university fund to help cover expenses due to the economic fallout from the pandemic, according to a separate survey by LendingTree. Another 15% of respondents said they had no funds for their children at all.
To bridge the growing gap between income and tuition fees, student loan balances will likely increase as more families have to borrow money to cover school fees.
Typically, 7 out of 10 seniors are graduates in the red, ahead of about $30,000 per borrower, according to data from the Institute for College Access & Success.
In the future, a 2020 high school graduate might face $37,200 in loans toward a degree at a public college or university, according to a NerdWallet analysis of data from the National Center for Education Statistics.