Smart parents know that the more they can do to ensure their children’s success when navigating the college and career planning process, the better off everyone will be. This includes understanding the student loan landscape and how it has changed over time.
Did you know that in 1976, the average cost of a year of college tuition and room and board was just $2,275?
College was so inexpensive that most students put themselves through school, and parents and other family members were much less involved.
There were also many fewer students attending college… and because there was so much less competition, jobs for college graduates were easier to come by.
The Times They Are A-Changin’
But… like singer/songwriter Bob Dylan once wrote, “The Times They Are A-Changin’.”
Today, a year of college is somewhere between $20,000-70,000.
And while in the 1970’s only about 25% of high school students pursued higher education, today that number is between 60-70%, so there is a lot more competition for available jobs that require a degree.
Because of the ever-rising cost of college, Americans now hold about 1.56 trillion in student loan debt. Almost seventy percent of bachelor’s degree recipients are graduating with debt, with the average student leaving school with over $29,800 in loans.
But, this is not just a problem for students. Their parents’ lives and finances are being impacted in a big way as well!
A recent study shows that about 3 million parents have $90 billion in federal student debt, in the form of Parent PLUS loans they took out to pay for their children’s college, with the parents holding an average debt of $35,600.
And while in 1968, for instance, a vast majority of 20-somethings were living independent lives, and more than half were married, today, recent Census data found that 36 percent of Americans 18 to 31 years old were still living with their parents. That was the highest level that had ever been recorded!
Also, 50% of recent graduates are either unemployed or underemployed. And a whopping 60% of people in their 20s and 30s are receiving some kind of financial support from their parents.
It’s Time for a Solid College and Career Plan
So, while in an earlier time it might have been normal for a parent to be much less involved in the college and career choice process with their children, these days parental involvement is almost essential!
Think about it: if between $100,000-$200,000 is going to be spent on a college education, and that it is almost inevitable that both students and parents are going to emerge from the experience with tens of thousands of dollars in loan debt, shouldn’t you have a plan for where that money is going?
The greatest success can come when students and parents are on board the same plan regarding the choice of college, college major, career path, and repayment of student debt.
We don’t advocate parents make these important decisions for a student, but we strongly encourage them to be part of their team, to emphasize the importance of their decisions, and to not take them lightly. And we encourage parents to educate students and themselves about the loan repayment process to help students take responsibility for the money that is being spent on college.
Don’t stay in the dark about your child’s college, career and student loan path, because “The Times They Are A-Changin’”!
Updated July 2019