Figuring out the best way to pay for college can be overwhelming even for the savviest families. A new survey suggests that many people have no idea where to start.
Almost half — 48 percent — of the people surveyed by the Credit Union National Association, a trade group, said they don’t know how many loans their children will need to pay for college. About one-quarter of parents said they were also clueless on the total dollar amount their children would need to borrow to pay for their college education, according to the report being released next week.
The group polled 717 parents of teenagers on their understanding of what it takes to pay for college and found that many underestimate the cost.
Here’s the perception of college debt: About 22 percent guessed that they would borrow between $10,000 and $25,000, and another 22 percent estimated that they would need to borrow more than $25,000 but less than $50,000. About 6 percent said they’d need to borrow less than $10,000, and toward the high end, 13 percent guessed they would need to borrow between $50,000 and $75,000. About 6.5 percent estimated that their debt load would top $100,000.
Here’s the reality: The average college student graduating this year will walk away with $26,500 in student loan debt, according to the National Conference of State Legislatures.
That debt load averaged $25,500 for someone earning a bachelor’s degree from a public four-year college; at a private nonprofit four-year college, it was $32,300, according to the Project on Student Debt, a nonprofit group.
At four-year for-profit colleges, students left with an average of $39,950.
Those debt loads are heaviest in many Mid-Atlantic and Northeastern states along with some states in the West and South, including California and Florida, according to studies.
Several reports suggest that college graduates are bogged down by that debt. People with student loan debt are less likely to own homes than those without college debt.
Still, families are optimistic the investment will pay off: 86 percent of parents surveyed said they believe that their children, after graduating, will land high-paying jobs.