WILMINGTON, Del.--(BUSINESS WIRE)--Borrowing money to pay for college costs is often a family affair, according to a recent national survey of 3,510 parents of college students from College Ave Student Loans conducted by Barnes & Noble College Insights℠. Not only will a parent likely need to serve as a co-signer on a child’s private student loan, many opt to help pay back the loan as well. More than 1 out of 3 parents (36%) say they will help their child pay back some or all of their student loans (federal or private).
“The road to college is a major family investment, and this includes creating a financial plan,” says Joe DePaulo, CEO and Co-Founder of College Ave Student Loans. “Our survey highlights that every family approaches paying for college in a way that meets their unique financial needs and goals. For families considering borrowing as an option, it’s important to examine all resources available and find the loan options that best serve your specific budget goals – both short-and-long term.”
Paying for college is one of life’s biggest financial stresses, according to the survey. Approximately 1 out of 3 parents say paying for college is more stressful than a mortgage payment (39%) and credit card debt (32%). To create a successful college funding strategy, this often includes multiple ways to pay. Scholarships, grants and federal loans in the student’s name should be the first options families look to when budgeting for college. When these sources aren’t enough to cover the full college cost, a private student or private parent loan may be an option families consider. To help families borrow smart for the upcoming school year, DePaulo suggests:
- Look at your child’s future salary. More than half of parents surveyed (57%) say they considered the potential income the child could earn at his/her career when choosing a college. Also consider this income when thinking about how much to borrow for school. An easy rule of thumb – don’t have your child take out more in student loans than they expect to earn his or her first year out of college.
- Consider total loan cost against future financial goals. Although the monthly payment is an important factor to consider, don’t ignore the total cost of the loan over the years. For nearly 1 out of 3 parents surveyed (30%), this includes retirement within the next 10 years. Check out the College Ave student loan calculator that allows borrowers to estimate total costs and ways to save.
- Weigh the credit impact of a parent or student loan. Are you comfortable with the loan appearing on both your credit reports? If you are both named on the loan – you’re both equally responsible – so payment history (the good or bad) will affect the credit record of both parent and child. If you’re not comfortable with that risk, or want to take on the full responsibility of a loan, then a parent loan may be an option to consider. A private parent loan – such as the one College Ave offers, may save you money against the federal option, offering qualified borrowers a lower interest rate and no origination fees. Unique to the College Ave parent loan, parents can also opt to have up to $2,500 deposited in the account of their choice to help pay for their child’s college expenses.
- Read customer reviews. The length of time it takes to pay back loans varies for families. In fact, the survey found more than 1 out of 10 parents (14%) are paying back their student loans while also paying for their child’s college education. Before borrowing from a private lender, make sure you’re comfortable with the lender and their reputation. What are their customers saying? How do they respond? Read customer reviews and verify the lender’s Better Business Bureau rating.
For more information about ways to plan and pay for college, visit the resources at College Ave Student Loans: https://www.collegeavestudentloans.com.
About the Survey
The College Ave Student Loans survey was conducted by Barnes & Noble College Insights℠. The national survey had 3,510 parent respondents and was conducted April 13 – April 17, 2018.
About College Ave Student Loans
College Ave Student Loans is simplifying the student loan experience so students can get on with what matters most: preparing for a bright future. As a fintech lending company with a sole focus on private student loans, we’re using technology and our deep industry expertise to connect families who need to cover education costs with lenders who can provide that funding. By specializing in student loans, we are able to give our customers the attention they deserve and deliver loans that are simple, clear, and personalized for the individual: we help you find your perfect fit. We offer competitive rates, a wide range of repayment options, and a customer-friendly experience from application through repayment. Visit: www.collegeavestudentloans.com.
About Barnes & Noble College
Barnes & Noble College, a Barnes & Noble Education company (NYSE:BNED), is a leading operator of college bookstores in the United States. Barnes & Noble College currently operates 781 campus bookstores and the school-branded e-commerce sites for each store, serving more than 5 million college students and faculty nationwide. General information on Barnes & Noble College can be obtained by visiting the Company’s website: www.bncollege.com.