Monday, March 25, 2013

New Trends in Paying for College

Perhaps the single greatest financial challenge many of us face is paying for a child's college tuition. With the ever-expanding cost of tuition, people have gotten more creative about finding ways to cover those costs. One such strategy is the parent Plus loan from the federal government, which the Wall Street Journal reports was used by 17 percent of all graduates in the class of 2012.

They put the parents in a pretty big hole, though. Back in the 2007-08 academic year, the average amount taken out by parents using these loans totaled $23,300; now that number is up to $33,800. By contrast, the average student who takes out a student loan leaves college with a loan debt of $28,700.

That may be one reason why student loans are still the most popular vehicle for helping with college tuition. Some 66 percent of all college students  graduate with student loans, in contrast to that 17 percent of parents who do.

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