WASHINGTON (5/28/14)--A survey conducted by the Credit Union National Association found that more than half of parents of college-age students do not know how long it will take to pay off student loans or the average interest rate of that debt. The online Financing Children's College Education Survey polled 717 parents of 17- or 18-year-olds who plan to or are seriously considering attending a college or university.
According to the survey, 59% of parents of prospective U.S. college students are not able to guess the average rate of their future loans, 53% do not know how long it will take to pay off future loans and 25% do not know their children's expected debt at graduation.
The survey also found that 86% of parents believe that their children are at least somewhat likely to receive a high-paying job upon graduating, suggesting that parents are willing to pay the cost of college tuition even while not knowing how their associated borrowing will affect their future debt and financial health.
"Today's findings suggest that the parents of graduating high school seniors could face significant levels of increased debt," said Pat Keefe, CUNA's senior vice president/chief communications officer. "Parents should speak with financial professionals to plan for their financial future, including their credit unions."
He added, "Managing debt is an important part of realizing one's financial goals and these debts can get on the parents' balance sheet right when they need to start planning in earnest for retirement. Credit unions stand ready to help in the planning."
Keefe also said the survey's findings are of particular concern because 68% of parents say that their children will need federal loans, and 40% indicated they will need private loans to support their tuition.
Other findings include:
The Washington Post's
Twenty-two percent of respondents anticipate taking out two or more student loans, while 11% anticipate a single loan.
Forty-eight percent reported that they didn't know how many loans their children would need to graduate.
Of the respondents who do have an idea of how much money they will owe when they graduate, 6% expect to have debt under $10,000; 22% say they will owe $10,000-$24,999; 22% expect debt of $25,000-$49,999; 13% expect debt of $50,000-$74,999; 6% expect to have debt between $75,000-$99,999; and 6% expect to have more than $100,000 in debt at graduation.
WonkBlog cited the CUNA survey Friday in a post examining the perception of college debt.