Know­ing what it costs to get through col­lege

Dayton Daily News - - IDEAS & VOICES - By Jack Kosakowski and Bren­dan Cough­lin

Across the coun­try, mil­lions of stu­dents are back in high school, catch­ing up with friends, play­ing fall sports and plan­ning for col­lege. At the same time, mil­lions of fam­i­lies are try­ing to fig­ure out how to pay for it all.

But a re­cent study shows that while many young peo­ple un­der­stand the need for ed­u­ca­tion be­yond high school to help achieve their goals, a huge seg­ment is un­pre­pared for the vast fi­nan­cial com­mit­ment.

What’s more, many fam­i­lies have min­i­mal sav­ings ac­crued for what can be a mas­sive fi­nan­cial de­ci­sion.

The sur­vey by Ju­nior Achieve­ment USA and Cit­i­zens Bank found that an as­tound­ing 52 per­cent of high school ju­niors, 40 per­cent of high school se­niors and 34 per­cent of col­lege fresh­men said they are un­pre­pared for manag­ing ed­u­ca­tional costs and pay­ing for col­lege.

One tell­tale rea­son for the trep­i­da­tion: re­search found a large seg­ment has less than $1,000 set aside for higher ed­u­ca­tion.

In­deed, the per­cent­age of teens with less than $1,000 in their col­lege sav­ings ac­counts is stag­ger­ing — 39 per­cent of high school ju­niors, 30 per­cent of high school se­niors and 29 per­cent of col­lege fresh­men.

Only 11 per­cent of ju­niors, 14 per­cent of se­niors and 19 per­cent of col­lege fresh­men said that they were “very pre­pared” for manag­ing the costs of col­lege.

That is likely due in part to a lack of ed­u­ca­tion about the costs of higher ed­u­ca­tion.

Other trou­ble­some data from the sur­vey is teens’ lack of aware­ness of the ac­tual cost of col­lege. For ex­am­ple, when asked the av­er­age an­nual tu­ition at a four-year pri­vate col­lege, 58 per­cent of high school ju­niors, 44 per­cent of high school se­niors and 42 per­cent of col­lege fresh­man said that they didn’t know. Sim­i­lar knowl­edge gaps ex­ist in their un­der­stand­ing of the costs at pub­lic uni­ver­si­ties.

The sur­vey was con­ducted by Wake­field Re­search and polled the views of 500 U.S. high school ju­niors, 500 U.S. high school se­niors and 500 U.S. col­lege fresh­men. The poll has a mar­gin of er­ror of plus or mi­nus 4.4 per­cent.

The data sug­gest ef­forts to ed­u­cate high school­ers and their fam­i­lies about the ever-ris­ing cost of higher ed­u­ca­tion are not gain­ing suf­fi­cient trac­tion. This is de­spite many pub­lic schools of­fer­ing sem­i­nars for stu­dents and par­ents on fi­nanc­ing col­lege.

The knowl­edge deficit when it comes to col­lege costs is un­ac­cept­able — be­cause en­rolling a young per­son in col­lege is fast be­com­ing among a fam­ily’s most far-reach­ing fi­nan­cial de­ci­sions, with all the at­ten­dant is­sues such as ex­ces­sive debt load and ca­reer de­ci­sions af­fected by those costs.

When it comes to col­lege, spend time talk­ing about what your child wants to get out of it and help them come up with a plan that works best for their fi­nan­cial fu­ture. Help them put col­lege costs into con­text. One way to do so would be to cal­cu­late what they can ex­pect to pay each month af­ter they grad­u­ate.

Fol­low­ing these sim­ple tips can go a long way but these re­sults make it clear that the cost of col­lege and the ef­fect it can have on a stu­dent’s fu­ture needs to be a pri­or­ity con­ver­sa­tion be­gin­ning at an ear­lier age. Jack Kosakowski is pres­i­dent and CEO of Ju­nior Achieve­ment USA. Bren­dan Cough­lin is the head of con­sumer de­posits and lend­ing at Cit­i­zens Bank. They wrote this for In­sid­eSources. com.

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