Study: Parents don’t provide enough help

Tyrel Linkhorn

Across the nation, grant money is down and tuition is on the rise.

At this time, when college students need all the help they can get, a recent AllianceBernstein Financial study found that parents may not be helping enough.

According to the study released in mid-October, parents aren’t saving nearly enough for their children’s education.

The study, which polled parents with a minimum household income of $50,000 and at least one child under the age of 18 with college aspirations, found that on average, parents planning to contribute to their child’s college education were anticipating saving enough to cover about 23 percent of an undergraduate program.

Student financial aid director Mark Evans said while it’s good that many parents are planning to save nearly a quarter of their children’s education expenses, it’s not quite enough.

“Anything is better than nothing,” he said. “Unfortunately, from what (government financial aid) is available, there’s going to be a gap.”

Evans didn’t dispute the findings of AllianceBernstein; however, he said some studies by the Ohio Board of Regents suggest many families overestimate college costs while underestimating the financial aid available.

Evans said the financial aid office isn’t expecting students and their families to be covering the entire cost of education, but rather to lessen the need for loans.

Currently, Evans said more than 65 percent of students have more than $21,000 in student loans.

Bill Spakes, sophomore business management major, said student loans are his only option. His parents aren’t paying for any of his education.

“I think about it all the time,” he said of the burden of paying for his college.

He said his parents expected him to get more financial aid than he did, but even a little money from his parents would be nice.

“I think parents should help out at least some,” he said.

Considering the cost of higher education today, Evans said it was important to begin planning early.

One of the problems for planning for college, Evans said, is that “one size doesn’t fit all.”

He said “first generation families,” families where the parents didn’t attend college, often have more trouble because they “aren’t familiar with that type of investment.”

Evans said it is important that parents think of paying for their children’s’ education as just that — an investment with lifelong benefits.

However, according to the study, 58 percent of parents spend more money every year on dining out than they save toward higher education for their children.

Evans said concerns that saved money will hurt the chance for financial aid are largely unfounded.

But Evans said in actuality, not every dollar of parental savings will work against receiving aid. The process takes many things into account, including parents’ age and likely retirement age, he said. And while some savings will lessen available aid, Evans indicated that most doesn’t.

Evans said one of the best and most popular college savings plan is the 529 college savings plans, which are administered by the state and tax-free. However, AllianceBernstein’s study found that 45 percent of parents weren’t aware of these plans.

Regardless of how parents anticipate helping their children with college expenses, Evans said it’s important to start planning sooner rather than later.

Contact student finance reporter Tyrel Linkhorn at [email protected].