A new Citizens Bank survey shows that parents wish they had more time to plan and say the process to get financing is more difficult than expected.
In its second annual Student Lending Survey, Citizens found almost one-third (30%) of parents say that they first spoke to their children about paying for school when they were in the 8th grade or earlier, and more than half (53%) before the end of their child’s freshman year.
While this is an encouraging trend and suggests that families are looking more closely at the long-term implications of student loan debt, a smaller number (9% when their kids were in the 8th grade) were actually looking into loan options available in the market during that time.
“While it is encouraging that more families are having the conversation early about the realities of paying for school, the data shows that 63 percent of parents still wish they had more time to navigate a difficult and confusing process,” says Brendan Coughlin, president of Consumer Deposits and Lending at Citizens Bank. “It’s clear that more has to be done to help prepare students for the future — whether it is through helping them navigate paying for college or educating them on how to manage their money by establishing savings and checking accounts.”
The survey also suggests that students are looking examining the long-term effect of debt.
- Parents (57%) are slightly more likely to agree that the cost of college was worth it versus students (50%).
- A smaller percentage of students than parents (51% vs. 58%) believe that parents should help pay for college.
Overall, families are still paying for college through a combination of sources that include both income and savings and both Federal and private student loans. To that point, the survey showed a wide gap on families’ savings strategies.
- 44% of parents have started to save for their kid’s college education before their child’s 11th birthday,
- 38% report setting aside no savings at all. This means that families are often shopping at the last minute to fill funding gaps.
“As tuition bills are sent out to families with children attending college this fall, it is important that they look at all of their options to fill any funding gaps,” said Coughlin. “For those who choose student loans, private student loans can be a good option and may offer lower rates depending on an individual’s credit profile.”
While these trends are encouraging, more than half of parents (55%) and students (56%) still report that the entire process of researching, comparing, and selecting a student loan was much more difficult than they thought.
- Two thirds (66%) of both parents and students agree that paying off student loans has taken longer than they expected.
- Additionally, 63% of parents and 60% of students say they wished they looked into college financing options earlier.
Citizens Bank offers numerous borrowing options for credit-qualified students, graduates, along with their families including the Citizens Bank Parent Loan, Citizens Bank Student Loan, and the Citizens Bank Student Loan with Multi-Year Approval. In addition, through its Education Refinance Loan, Citizens Bank is the only national bank to offer refinancing options for both private and federal student loans to credit-qualified borrowers.