College is an experience that is vastly different for every student – but one thing holds true for all of them:
Attending college can be really, really expensive.
Most of the time, incurring debt is a necessity for undergraduates. 60 percentof the recent college graduates have student debt. Collectively, there is $1.41 trillion in outstanding student loan debt. Furthermore, the average borrower owes $28,400 in student loan debt at graduation.
In today’s age, the majority of students simply cannot afford to attend university without the help of their parents or guardians. Simultaneously working to put yourself through college while also handling the academic responsibilities of a student is a near impossible feat.
Recently, LendEDU surveyed over 1,300 college graduates between the ages of 25 and 54 and found some counterintuitive trends amongst the respondents.
The data from this survey showed that students whose parents did not help pay for their college expenses actually graduated with the lowest average student debt balance. Further, those who had their parents pay for half of all college expenses experienced the highest average student debt balance after graduating.
1,310 four-year college graduates who are currently paying off student debt were asked a litany of questions regarding their student debt situation. The majority of these respondents were not helped by their parents in paying for college expenses. In fact, the lowest one group were those whose parents paid for the majority of their university tab.
582, or 44 percent, of graduates did not receive help from their parents in paying for college. 465, or 36 percent, of respondents had parents that helped pay a little bit of their college expenses. Meanwhile, 149, or 11 percent, of those polled had their parents pay half of all college expenses. Finally, 114, or 9 percent, of borrowers’ parents paid for the majority of college expenses.
When combined, 80 percent of graduates in this poll either received no help or minimal help from their parents in paying for college. One would think this would be a contributing factor to the enormous student loan debt figures that face the United States; nearly all students receive little to no help from their parents in paying for college expenses, so they must incur a ton of loan debt to shoulder the cost.
However, this is not the case when other statistics from this poll are seen.
As it turns out, students who received no help from their parents in paying for college costs actually had the lowest average student debt balance after graduating. Additionally, those who received minimal help had a lower average student debt balance than those who had parents that paid for half of all university expenses.
On average, students that received no monetary assistance from their parents left school with a student debt balance of $39,575. Those that were given minimal help from their parents had an average debt balance of $42,335. Respondents that had parents who paid for half of their college expenses left school with an average student loan balance of $42,527. Lastly, those borrowers who were almost entirely helped by their parents in paying for college had an average balance of $41,411.
One would think that as the level of help a student receives from their parents in paying for college becomes smaller, the students student loan balance would become greater. So then why do graduates that received no help from their parents have the lowest average student debt balance?
The answer could be that this group of students understood their economic situation and adapted accordingly. If they knew they would receive no help from their parents, perhaps they went to a cheaper, local, and/or public institution where expenses like boarding were not taken on. Or, this group may have been more frugal or worked one or two jobs during their entire college tenure and were able to make consistent loan payments.
Interestingly, there was no real correlation between the salaries of parents and how much debt their children incurred while in college. Respondents were broken into four groups depending on how much help their parents provided in funding college expenses: (1) Parents provided no help; (2) Parents provided minimal help; (3) Parents paid for half; (4) Parents paid for majority. For each group, respondents were further broken down according to what income bracket their parents fell into: (1) $150,000 or more; (2) $125,000 – $149,999; (3) $100,000 – $124,999; (4) $75,000 – $99,999; (5) $50,000 – $74,999; (6) $25,000 – $49,999; (7) Under $25,000.
Parents Provided No Help
Parents Provided Minimal Help
Parents Paid for Half
Parents Paid for Majority
Both the highest and lowest average student balances were found within the group that had their parents pay for half of the respondent’s college expenses. In fact, the lowest average student debt balance was found within the $25,000 – $49,999 income bracket, and the balance was $19,041. The highest balance was in the under $25,000 income bracket and was $97,132. It is not surprising to find the highest average student debt balance within the lowest possible income bracket. What was surprising was that the lowest average student debt balance was found in the second lowest income bracket. One would expect that the lowest average student balance would be found within the highest possible income bracket for the group that had their parents pay for the majority of their education expenses. This was not the case, and that average student debt balance was at $43,222.
These counterintuitive trends having to do with parents’ income and the children’s student debt balances existed throughout the study.
For example, within the group of graduates that did not have their parents pay for any college expenses, the highest average student debt balance, $47,963, was also the group whose parents were in the highest income bracket. For this same group, the second lowest average student debt balance, $39,003, belonged to the respondents whose parents were in the lowest income bracket.
For the group that had their parents help pay for a minimal amount of their college expenses, the highest student debt balance, $66,285, existed within the $125,000 – $149,999 income bracket. In this same group, the second lowest average student balance, $34,435, was found in the third lowest income bracket, $50,000 – $74,999.
In regards to the group of respondents that had their parents pay for the majority of their college expenses, the highest income bracket group, $150,000 or more, had a greater average student debt balance than the next three income brackets that were lower.
LendEDU conducted the survey in April 2017 using Pollfish. In total, LendEDU collected responses from over 1,300 respondents. All respondents were screened to be a 4-year college graduate who is currently working to repay student debt. Student debt data was self reported by the respondents and was not verified by LendEDU. LendEDU financed this poll.
Author: Mike Brown
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