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Parents Prioritize Academics over Cost When Considering Their Child’s College

May 31, 2017

Survey from Discover Student Loans Reveals a Third of Parents Are Very Worried Their Child’s Debt Will Impact Their Retirement Plan

RIVERWOODS, Ill.--(BUSINESS WIRE)-- The sixth annual Discover Student Loans survey reveals half of parents consider a school’s academic program the most important factor when determining which college or university their child might attend, while just 31 percent said cost was the determining factor. Although cost is not the top factor when it comes to selecting a school, 74 percent of parents said they are very or somewhat worried about having enough money to help pay for their child’s college education.

Parents Are Worried about Taking on Their Child’s Debt

To help pay for their child’s college education, 29 percent of parents said most of the money will come from student loans, followed by 27 percent using family savings and 13 percent planning to use 529 savings plan.

While 55 percent of parents reported are very or somewhat likely to help their child pay student loans, a number that has stayed consistent in the past three years, 59 percent of parents are very or somewhat worried that taking on their child’s debt will impact their retirement plan.

“We would like to see more families take advantage of the Free Application for Federal Student Aid [FAFSA], which determines eligibility for financial aid,” said Mike Boush, senior vice president of Discover Student Loans. “Our survey showed that only 45 percent of parents filled out the FAFSA, which means families could be missing out on grants and scholarships that do not need to be paid back. We encourage all families to complete the FAFSA regardless if they think they’ll qualify.”

Parents Are Talking With Their Child about the Cost of College

Despite feeling concerned about having enough money for college, nearly three-quarters of parents, 74 percent, said they plan to help their child pay for their college education. However, most aren’t planning to cover the entire cost themselves. Eighty-six percent of parents said their child should share in the responsibility of paying for at least some of their college education, a number that has remained consistent for the past three years.

“It’s important for children to learn strong financial habits especially if they’re going to share in the responsibility of paying for college,” said Boush. “Our survey showed that nearly a third of parents responded saying they could only afford up to 25 percent of their child’s education, so it’s clear that parents and students will need to discuss how to fill that gap. Having these conversations around paying for college is a great first step to helping children learn how to manage their finances.”

A large majority of parents, 82 percent, said they are very or somewhat knowledgeable about the cost of a college education and most say their child understands how much debt they will graduate with. In fact, 92 percent of parents think it is very or somewhat important to include their child in discussions on financial literacy as it relates to paying for college.

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 17-20, 2017, 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 17-20, 2017 By Rasmussen Reports
Margin of Sampling Error, +/- 3 percentage points with a 95% level of confidence
Commissioned by Discover Student Loans
                         
How important is college to your child’s future?   2012   2013   2014   2015   2016   2017
Very important   81%   87%   85%   81%   82%   83%
Somewhat important   14%   11%   11%   14%   13%   14%
Not very important   3%   1%   3%   3%   3%   2%
Not at all important   1%   0%   1%   0%   1%   1%
Not sure   1%   0%   0%   0%   1%   0%
           
                         
Beyond tuition, how knowledgeable do you feel about the entire cost of a college education these days?   2012   2013   2014   2015   2016   2017
Very knowledgeable   48%   49%   48%   46%   46%   40%
Somewhat knowledgeable   39%   39%   42%   39%   40%   42%
Not very knowledgeable   11%   9%   8%   12%   11%   14%
Not at all knowledgeable   2%   3%   2%   3%   2%   2%
Not sure   1%   0%   0%   1%   1%   2%
 
                         
Will you be helping your child pay for his or her college education?   2012   2013   2014   2015   2016   2017
Yes   74%   81%   77%   75%   78%   74%
No   15%   12%   16%   16%   13%   16%
Not sure   11%   8%   7%   9%   10%   9%
 
                         
How worried are you about having enough money to help pay for your child’s college education?   2012   2013   2014   2015   2016   2017
Very worried   47%   47%   44%   45%   43%   40%
Somewhat worried   28%   32%   30%   33%   32%   34%
Not very worried   17%   15%   18%   15%   17%   18%
Not at all worried   6%   6%   7%   6%   7%   8%
Not sure   1%   0%   1%   1%   1%   1%
 
                         
How much of your child’s education can you afford?   2012   2013   2014   2015   2016   2017
None of it   24%   21%   21%   24%   22%   21%
Up to 25%   29%   29%   30%   31%   29%   29%
Up to 50%   15%   18%   19%   18%   18%   16%
Up to 75%   10%   12%   11%   8%   10%   9%
All of it   13%   11%   11%   9%   11%   13%
Not sure   10%   9%   8%   10%   10%   11%
 
                         
Where will most of the money come from to pay for your child’s college education?   2012   2013   2014   2015   2016   2017
529 savings plan   12%   11%   11%   12%   9%   13%
Family savings   24%   27%   29%   25%   27%   27%
Student loans   28%   29%   29%   29%   32%   29%
A second job   5%   6%   5%   5%   5%   6%
2nd mortgage or refinance   3%   3%   2%   3%   3%   3%
Retirement funds   4%   4%   6%   3%   4%   2%
Some other source   13%   12%   10%   13%   12%   12%
Not sure   11%   10%   7%   9%   9%   9%
 
                         
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?   2012   2013   2014   2015   2016   2017
Very likely   22%   25%   24%   25%   26%   25%
Somewhat likely   33%   33%   28%   33%   35%   30%
Not very likely   28%   25%   30%   28%   24%   27%
Not at all likely   13%   13%   12%   11%   10%   11%
Not sure   4%   4%   6%   4%   5%   6%
 
                         
Which do you consider the most reliable source of information on paying for college?   2012   2013   2014   2015   2016   2017
Guidance counselors in high school   7%   6%   7%   7%   11%   11%
Financial aid offices of colleges   47%   47%   44%   43%   40%   44%
Banks and other lenders   3%   3%   3%   4%   5%   3%
Personal financial advisors   11%   13%   14%   14%   14%   12%
Friends and family   6%   8%   9%   7%   8%   8%
The Internet   6%   7%   6%   6%   5%   6%
Some other source   8%   8%   8%   9%   8%   8%
Not sure   11%   9%   9%   11%   9%   9%
 
                         
How much responsibility should your child have in paying for their college education?   2012   2013   2014   2015   2016   2017
All of it   12%   13%   15%   15%   16%   16%
most of it   27%   29%   32%   30%   32%   30%
Some of it   48%   48%   43%   46%   40%   40%
None of it   10%   7%   8%   7%   9%   9%
Not sure   3%   3%   2%   3%   3%   4%
 
                         
Is earning potential after graduation more or less important to your child’s education than his or her major?   2012   2013   2014   2015   2016   2017
More important   38%   42%   40%   47%   43%   41%
Less important   21%   22%   21%   19%   21%   23%
About as important   32%   31%   30%   27%   30%   29%
Not sure   10%   5%   9%   7%   6%   6%
 
                     
Are you limiting your child’s college choices based on price?   2013   2014   2015   2016   2017
Yes   49%   44%   48%   43%   41%
No   40%   48%   41%   46%   50%
Not sure   11%   9%   11%   11%   9%

 

                     
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?   2013   2014   2015   2016   2017
Yes   42%   33%   44%   42%   39%
No   44%   53%   43%   42%   45%
Not sure   14%   14%   13%   16%   16%
 
                     
Is your child planning to use student loans to pay for their college education?   2013   2014   2015   2016   2017
Yes   50%   52%   54%   55%   49%
No   32%   28%   26%   27%   29%
Not sure   18%   20%   20%   18%   22%
 
                     
Answered By Those Who Plan to Use Student Loans: Does your child plan to use federal student loans, private loans or a combination of both?   2013   2014   2015   2016   2017
Federal   32%   38%   38%   34%   37%
Private   4%   3%   5%   6%   6%
Combination of both   54%   48%   47%   50%   52%
Not sure   10%   11%   9%   10%   5%
 
                 
Answered By Those Who Plan to Use Student Loans: 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?   2014   2015   2016   2017
Very worried   55%   58%   50%   49%
Somewhat worried   30%   25%   31%   33%
Not very worried   12%   14%   16%   14%
Not at all worried   3%   3%   3%   3%
Not sure   0%   0%   0%   1%
 
                     
If taking out loans in your child’s name, does your child understand how much debt they will graduate with?   2013   2014   2015   2016   2017
Fully understand   40%   42%   39%   41%   38%
Somewhat understands   32%   32%   32%   34%   32%
Doesn’t understand   15%   14%   14%   12%   17%
Not sure   13%   12%   15%   13%   13%
 

 

           
When thinking about the options to reduce the cost of college for your child, which of the following do you think is most effective?   2015   2016   2017
Attending a community college   29%   30%   27%
Attending a public university versus a private university   33%   31%   33%
Deferring college for a year   1%   2%   3%
Having your child live at home while attending college   12%   11%   11%
Working part-time while attending college   14%   14%   13%
Not sure   11%   12%   12%
 
                     
How knowledgeable are you about the differences between federal and private loans?   2013   2014   2015   2016   2017
Very knowledgeable   29%   30%   29%   32%   28%
Somewhat knowledgeable   39%   40%   37%   32%   38%
Not very knowledgeable   24%   22%   26%   26%   25%
Not at all knowledgeable   6%   7%   7%   8%   7%
Not sure   1%   1%   2%   2%   2%
 
         
Did you complete the Free Application for Federal Student Aid?   2016   2017
Yes   44%   45%
No   48%   48%
Not sure   8%   7%
 
         
Answered By 440 Adults Who Have Kids Going To Kids Who Filled Out the FAFSA Application: How difficult was filling out the FAFSA?   2016   2017
1 - very easy   9%   7%
2   15%   10%
3   36%   36%
4   26%   27%
5 - very difficult   15%   20%
 
         
How many times have you had a discussion with your child about how to pay for their college education?   2016   2017
Never   12%   10%
Once   8%   9%
2-3 times   27%   29%
4-6 times   17%   18%
More than 6 times   33%   31%
Not sure   3%   2%

 

         
How important is including your child in discussions on financial literacy as it relates to paying for college?   2016   2017
Very important   76%   74%
Somewhat important   17%   18%
Not very important   3%   3%
Not at all important   2%   3%
Not sure   2%   2%
 
     
In deciding which school your child might attend, what factor is most important?   2017
School reputation   9%
Academic program   50%
Cost   31%
Size   1%
Location   6%
Not sure   3%
 
     
When do you expect your family to make a decision on which school your child might attend?   2017
Upon early decision acceptance   21%
Upon regular acceptance   34%
Upon scholarship award notification   22%
At or near decision deadline   8%
Not sure   15%
 
     
How worried are you that taking on your child’s debt will impact your retirement plan?   2017
Very worried   31%
Somewhat worried   28%
Not very worried   22%
Not at all worried   14%
Not sure   4%

Source: Discover Financial Services

Discover Financial Services

Susan J. Villalobos

224-405-5344

susanvillalobos@discover.com

@Discover_News