Gone are the days when parents would foot the bill for their children’s college education regardless of the grades they made. In fact, a new survey by Fidelity Investments showed that a whopping two-thirds of parents now require their children to maintain a B average or higher if they want to keep getting their college costs paid for, according to Bloomberg. The survey asked nearly 2,400 families questions concerning paying for college, the article noted. The results indicate that parents are requiring more accountability from their college-aged children, the article explained, perhaps in light of rising college costs and a troubled economy. Parents are increasingly wanting their children to take their college education — and the money it costs to attain such — seriously.
The survey showed that parents of college-aged students were asking more from their children, including encouraging them to work part time to help offset the cost of college expenses, to live at home and commute to a college nearby to save on housing expenses, and to attend state public colleges, which generally charge less in tuition than private colleges, the article explained. The Bloomberg article also cited a separate survey published this year by Bank of America, which revealed that even 29% of responding families with $250,000 or more in assets were not paying for all of their child’s higher education, opting instead to have their children pay for some of their expenses so that they would learn financial responsibility, the article pointed out.
That said, the Fidelity survey also revealed that parents are increasingly concerned about the level of student loan debt their children will be taking on. The survey revealed that 75% of parents this year don’t want to burden their children with education loans; in 2007, that percentage was only 65%, the article stated. Considering the fact that last year student loan debt surpassed credit card debt in the U.S., it’s clear that parents’ increasing concern is not far off the mark.
Another key finding of the survey was that parents have started preparing earlier for their children’s college educations, the article showed. For example, the survey showed that 40% of families with children younger than five years old have started saving for that child’s college today compared with only 27% back in 2007, when Fidelity first started issuing such surveys, the article explained. These college funds are very often 529 plans, the article noted. According to the U.S. Securities and Exchange Commission, 529 plans are typically state-sponsored and include both pre-paid tuition plans and college saving plans that cover all higher education related expenses.
In conclusion, while parents are saving earlier for their children’s college education and are increasingly concerned about their children’s future student loan debt burden, they are also increasingly requiring their children to share in the sacrifice it takes to attend college.
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