We’re in the midst of the graduating season for high schoolers and college students. We’re also in the midst of a time when new graduates realize they’re dead broke, deeply in debt and have to turn to the bank of mom and dad for their day-to-day finances.
Survey Says Students Leaning on Parents
Upromise, a savings division of student lender Sallie Mae, released the results of a new survey of 500 students and 500 parents Tuesday which revealed that half of United States college students expect to rely on their parents for money for up to two years after graduation. Also, half of students noted they’d be willing to pay their parents rent if they had to move back in after college. But one-fifth of students say if they moved back home it would be of no cost to them.
What do parents think about this new type of arrangement? Well, 65 percent of parents say they will have to financially support their children for up to five years. More than one-third (36 percent) purport they expect to aid their children for more than two years, which is significantly up from 18 percent a year ago. Five percent of parents would not permit their child to move back home after school.
Study authors aver that parents and children of today are lot more content about this situation than previous generations. In previous years, children would leave the nest, get a job, get a place and get married, but this may not be feasible in today’s landscape, which isn’t surprising considering that nearly one-third of millennials are still living at home.
“We were pleasantly surprised that parents and students were very aligned in their expectations,” said Erin Condon, president of Upromise by Sallie Mae, in an interview with MarketWatch. “One could argue that this generation is entitled or spoiled, but you could always argue that they are financially responsible and not biting off more than they can chew by making effort to get off on the right foot to make sure that long-term success is there.”
Surprisingly, both parents and students are optimistic about employment opportunities post-college. According to the survey, two-thirds of parents and students think the student will be able to land a job in their chosen field within just six months after earning a degree.
I Wish We Saved Earlier
When it comes to college affordability, 52 percent of parents and 48 percent of students wished they started saving earlier for college. Due to this finding, the researchers listed a few tips that families today can start doing to help make post-secondary school somewhat more affordable:
- Launch a savings account
- Make regular contributions
- Take advantage of tax credits and deductions
“Many of us assume that parents and teens have opposing viewpoints, especially on the subject of money, but these findings show that both generations are in sync when it comes to the challenges of preparing for college,” added Condon in a press release. “The good news is that it is never too late to start saving and there are tools and resources available to get you on the right track no matter where you are in the process.”
Final Thoughts
Although this story does take an inside look into the struggles that students face, we have to also realize the financial pressures that parents are having to overcome. Not only do they have to look after their adult children but they also have to care for their own parents. The burden of tuition can be minimized as long as families start saving early and utilize tax credits. Otherwise, a graduate will be straddled with $30,000 student loan debt.
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