Majority of Americans Say Student Loan Debt is Too Much
Americans are growing more wary of mounting student loan debt and the value of higher education. According to a new COUNTRY Financial survey, four in five (81 percent) say the expected average level of student loan debt, $29,000*, is too high.
Concerns over rising tuition and uncertain employment prospects may be fueling doubts about the fiscal value of college. One in four (26 percent) say, given the rising costs, a college education is not a good financial investment, up seven points from 2010. It is the greatest number of people to feel this way in the survey’s four-year history. Since 2008, those believing college is a good investment dropped from 81 percent to 58 percent.
“It’s easy to see why Americans are uncertain about college spending, especially since the national student loan debt is at an all-time high,” says Keith Brannan, vice president of Financial Security Planning. “However, college is a long-term investment and having a degree significantly increases your earning potential. That’s why it’s critical to have a plan in place to help you prepare to make that investment.”
Brannan offers these suggestions to help offset rising college costs:
- Investigate alternate or tax-advantaged ways to save and pay for an education, like grants, tax-favored college savings plans or low-interest loans.
- Consider having your child work part-time. A majority of Americans (78 percent) say children should work a part-time job to help pay for college.
Putting retirement firstJuly 19, 2011
On a positive note, the number of Americans who are prioritizing retirement savings continues to increase. Nearly half (46 percent) say it is more important to save for their own retirement over a child’s college education, up three points from 2010 and four points from 2009.
“It’s encouraging Americans are increasingly seeing the necessity of saving for their own retirements,” adds Brannan. “Regardless of age, you can always borrow money for college, but no one will lend you money to retire.”
“Gen Y” has a different take on college funding responsibilitiesJuly 19, 2011
Gen Y adults (ages 18-29) expect to assume a larger burden of paying for a college education than those in previous generations.
- Gen Y Americans are more likely to say saving for a child’s education (66 percent) is more important than saving for retirement (18 percent), while other age groups say the opposite. Retirement saving sentiments for this age group dropped 10 points from 2010.
- Just 58 percent say children should get a part-time job to help pay for some college costs. That is at least 20 points lower than any other age group.
- Twenty-three percent believe parents should foot the entire bill for a child’s college education. This is two points higher than in 2010 and at least eight points higher than other age groups.
*According to the Department of Education estimate for 2012
The COUNTRY survey on college is based on a national telephone survey of 3,000 Americans and is compiled by Rasmussen Reports, LLC (www.rasmussenreports.com), an independent research firm. The margin of sampling error for this survey is approximately +/- 2 percentage points with a 95 percent level of confidence.
About COUNTRY Financial
COUNTRY Financial (http://www.countryfinancial.com) serves about one million households and businesses throughout the United States. It offers a full range of financial products and services from auto, home and life insurance to retirement planning services, investment management and annuities.