Back

More Students Expected to Help Pay for College as Parents Become Less Worried about Costs

May 09, 2016

Survey Reveals More Families Using Federal and Private Student Loans to Help Fund College; However, Less Than Half Completed the FAFSA®

RIVERWOODS, Ill.--(BUSINESS WIRE)-- The fifth annual survey from Discover Student Loans reveals that parents are slightly less worried when it comes to having the funds to pay for college while nearly half, 48 percent, expect their child to pay for all or most of their education, up from 39 percent in 2012.

“While a vast majority of parents still report that they want to help their children pay for college, it’s clear that students are being asked to take on more financial ownership than in previous years,” said Danny Ray, president of Discover Student Loans. “With an increase in responsibility comes the need to be prepared, and we encourage families to have discussions early and often on how to pay for college.”

The cost of college is an important factor when deciding on a school and 43 percent of parents responded saying that they are limiting their child’s college choice based on price. Interestingly, this number has decreased since last year, when nearly half, 48 percent, said price was limiting the choice of college.

Parents and Students Continue to Turn to Student Loans and Only Half Completed the FAFSA

To help pay for college, 55 percent of parents say their children plan to use student loans to pay for college, up from 50 percent in 2012. Parents also appear to be more willing to help their children if they take out student loans, as 61 percent are very or somewhat likely to help them pay back loans, up from 55 percent of parents in 2012.

However, the majority of college-bound students appear to be missing out on an opportunity for federal student aid. According to the 2016 survey, only 44 percent of families completed the Free Application for Federal Student Aid (FAFSA).

“We’re happy that 95 percent of parents responded saying they continue to see the value in their child earning a college degree, but we want them to be clear on the financial aid and student loan processes,” said Ray. “Filling out the FAFSA is the first step in determining college financial aid eligibility, and we provide useful tools to help families through that process. If families are left with a gap amount after exploring scholarships and grants, then we encourage them to review all their options and determine what works best for their situation.”

When learning about scholarships, grants and loans, students are turning to a variety of resources. When asked to consider the most reliable sources of information, eleven percent of families said high school guidance counselors, up four percent from last year, and 40 percent of parents said college financial aid offices, which is a decline from 47 percent in 2012.

Impact of Long-term Student Loan Debt

Parents appear to be slightly less worried about the long-term financial impact student loans may have on their child’s future. While half of parents responded saying they were very worried that student debt may affect their child’s ability to buy a house, car or other large purchase, the number is down from 58 percent and 55 percent in 2015 and 2014, respectively.

Discover Student Loans offers tools and resources to help parents and students understand the college financial process. For more information about Discover Student Loans, please visit www.discover.com/student-loans.

About the Survey

The Discover national survey of 1,000 adults who have children 16 to 18 years old who are planning to attend college was conducted March 30-April 3, 2016, by Rasmussen Reports, an independent survey research firm (http://www.rasmussenreports.com). The margin of sampling error was +/-3 percentage points with a 95 percent level of confidence.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America's cash rewards pioneer, and offers private student loans, personal loans, home equity loans, checking and savings accounts and certificates of deposit through its direct banking business. It operates the Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit www.discover.com/company.

National Survey of 1,000 Adults With Children 16-18 Years Old
Who Have Children Who Are Planning on Going to College
Conducted March 30-April 3, 2016 By Rasmussen Reports
Margin of Sampling Error, +/- 3 percentage points with a 95% level of confidence
Commissioned by Discover Student Loans

                               
2016     2015     2014     2013     2012     1. How important is college to your child’s future?
82% 81% 85% 87% 81% Very important
13% 14% 11% 11% 14% Somewhat important
3% 3% 3% 1% 3% Not very important
1% 0% 1% 0% 1% Not at all important
1%     0%     0%     0%     1%     Not sure
                               
2016     2015     2014     2013     2012     2. Beyond tuition, how knowledgeable do you feel about the entire cost of a college education these days?
46% 46% 48% 49% 48% Very knowledgeable
40% 39% 42% 39% 39% Somewhat knowledgeable
11% 12% 8% 9% 11% Not very knowledgeable
2% 3% 2% 3% 2% Not at all knowledgeable
1%     1%     0%     0%     1%     Not sure
                               
2016     2015     2014     2013     2012     3. Will you be helping your child pay for his or her college education?
78% 75% 77% 81% 74% Yes
13% 16% 16% 12% 15% No
10%     9%     7%     8%     11%     Not sure
                               
2016     2015     2014     2013     2012     4. How worried are you about having enough money to help pay for your child’s college education?
43% 45% 44% 47% 47% Very worried
32% 33% 30% 32% 28% Somewhat worried
17% 15% 18% 15% 17% Not very worried
7% 6% 7% 6% 6% Not at all worried
1%     1%     1%     0%     1%     Not sure
                               
2016     2015     2014     2013     2012     5. How much of your child’s education can you afford?
22% 24% 21% 21% 24% None of it
29% 31% 30% 29% 29% Up to 25%
18% 18% 19% 18% 15% Up to 50%
10% 8% 11% 12% 10% Up to 75%
11% 9% 11% 11% 13% All of it
10%     10%     8%     9%     10%     Not sure
                               
2016     2015     2014     2013     2012     6. Where will most of the money come from to pay for your child’s college education?
9% 12% 11% 11% 12% 529 savings plan
27% 25% 29% 27% 24% Family savings
32% 29% 29% 29% 28% Student loans
5% 5% 5% 6% 5% A second job
3% 3% 2% 3% 3% 2nd mortgage or refinance
4% 3% 6% 4% 4% Retirement funds
12% 13% 10% 12% 13% Some other source
9%     9%     7%     10%     11%     Not sure
                                     
2016     2015     2014     2013                 7. How knowledgeable are you on the difference between federal and private loans? *
32% 29% 30% 29% Very knowledgeable
32% 37% 40% 39% Somewhat knowledgeable
26% 26% 22% 24% Not very knowledgeable
8% 7% 7% 6% Not at all knowledgeable
2%     2%     1%     1%                 Not sure
                   
2016                 8. Did you complete the Free Application for Federal Student Aid? *
44% Yes
48% No
8%                 Not sure
                   
2016                 9. (Answered only by those who said they completed the application) Using your keypad on a scale of 1 to 5 where five is very easy and 1 is very difficult how would you rate your experience in filling out the Free Application for Federal Student Aid? *
15% 1 – Very difficult
26% 2
36% 3
15% 4
9%                 5 – Very easy
                                     
2016     2015     2014     2013                 10. Is your child planning to use student loans to pay for their college education? *
55% 54% 52% 50% Yes
27% 26% 28% 32% No
18%     20%     20%     18%                 Not sure
                               
2016     2015     2014     2013           11. (Answered only by those who said they were planning to use student loans to pay for college) Does your child plan to use federal student loans, private loans or a combination of both? *
34% 38% 38% 32% Federal loans
6% 5% 3% 4% Private loans
50% 47% 48% 54% A combination of both
10%     9%     11%     10%           Not sure
                       
2016     2015     2014         12. (Answered only by those who said they were planning to use student loans to pay for college) How worried are you that student loan debt may affect your child’s ability to buy a house, car or some other large purchase after graduation? *
50% 58% 55%     Very worried
31% 25% 30% Somewhat worried
16% 14% 12% Not very worried
3% 3% 3% Not at all worried
0%     0%     0%             Not sure
                               
2016     2015     2014     2013     2012     13. If your child had to rely on student loans or other types of loans for college, how likely are you to help them pay back the loans?
26% 25% 24% 25% 22% Very likely
35% 33% 28% 33% 33% Somewhat likely
24% 28% 30% 25% 28% Not very likely
10% 11% 12% 13% 13% Not at all likely
5%     4%     6%     4%     4%     Not sure
                                     
2016     2015     2014     2013                 14. If you are taking out loans in your child’s name, does your child understand how much debt they will graduate with? *
41% 39% 42% 40% Fully understands
34% 32% 32% 32% Somewhat understands
12% 14% 14% 15% Doesn’t understand
13%     15%     12%     13%                 Not sure
                   
2016                 15. How many times have you had a discussion with your child about how to pay for their college education? *
12% Never
8% Once
27% 2-3 times
17% 4-6 times
33% More than 6 times
3%                 Not sure
                   
2016                 16. How important is including your child in discussions on financial literacy as it relates to paying for college? *
76% Very Important
17% Somewhat Important
3% Not very important
2% Not at all important
2%                 Not sure
                               
2016     2015     2014     2013     2012     17. Which do you consider the most reliable source of information on paying for college?
11% 7% 7% 6% 7% Guidance counselors in high school
40% 43% 44% 47% 47% Financial aid offices of colleges
5% 4% 3% 3% 3% Banks and other lenders
14% 14% 14% 13% 11% Personal financial advisors
8% 7% 9% 8% 6% Friends and family
5% 6% 6% 7% 6% The internet
8% 9% 8% 8% 8% Some other source
9%     11%     9%     9%     11%     Not sure
                               
2016     2015     2014     2013     2012     18. How much responsibility should your child have in paying for their college education?
16% 15% 15% 13% 12% All of it
32% 30% 32% 29% 27% Most of it
40% 46% 43% 48% 48% Some of it
9% 7% 8% 7% 10% None of it
3%     3%     2%     3%     3%     Not sure
                               
2016     2015     2014     2013     2012     19. Is earning potential after graduation more or less important to your child’s education than his or her major?
43% 47% 40% 42% 38% More important
21% 19% 21% 22% 21% Less important
30% 27% 30% 31% 32% About as important
6%     7%     9%     5%     10%     Not sure
                             
2016     2015     2014     2013         20. Are you limiting your child’s college choice based on price? *
43% 48% 44% 49% Yes
46% 41% 48% 40% No
11%     11%     9%     11%         Not sure
                     
2016     2015             21. When thinking about the options to reduce the cost of college for your child, which of the following do you think is most effective? *
30% 29% Attending a community college
31% 33% Attending a public university versus a private university
2% 1% Deferring college for a year
11% 12% Having your child live at home while attending college
14% 14% Working part-time while attending college
12%     11%             Not sure
                           
2016     2015     2014     2013       22. Are you more likely to help fund your child’s education if they major in a field that has a higher likelihood of them landing a job? *
42% 44% 33% 42% Yes
42% 43% 53% 44% No
16%     13%     14%     14%       Not sure
 
* Not asked in all past surveys.

Source: Discover Financial Services

Discover Financial Services

Rob Weiss

224-405-6304

robertweiss@discover.com

@Discover_News