U.S. News & World Report
A new survey has found that not only students, but parents are concerned about the effects of taking out loans for a college education. Findings by the Citizens Financial Group show that most parents believe the burden of student debt is increasing for them as well as for their children. More than half of parents polled are concerned that student loan debt will jeopardize their own retirement.
The survey included 5,000 Americans older than 18, including parents of 15- to 24-year-olds and adults between the ages of 18 and 34. Ninety-four percent of parents of college students said they were increasingly feeling the burden of student loan debt, and 45 percent admitted they have no plan for managing that debt. Eighty-eight percent of parents of college students agreed that college is a worthwhile investment, but 70 percent were worried it will not pay off in the future. The poll found similar concerns among college students.
Those who took on Parent PLUS loans, private loans, or are helping their kids to repay loans may be under the greatest burdens. Many experts say the PLUS program is in crisis, because these loans have no limit, have higher interest rates, are not subsidized, and have fewer flexible repayment options. Federal data show that as of June 30, 3.1 million parent PLUS loan recipients owe nearly $62 billion. Middle- and upper-middle income students appear to benefit most from parent PLUS loans. The Education Department is pushing to loosen the credit-check requirements for PLUS loans, but some say the changes do not do enough to prevent families from borrowing too much.