Student loan debt is on the rise, but are students prepared for what managing that debt will really mean in the future? Maybe not, a recent study shows.
The study, conducted by COUNTRY Financial, found that 9% of parents talk to their kids about managing their student loan debt, Nasdaq reported.
That could be a problem, since today’s college graduates who earned a bachelor’s degree leave school with about $29,200 in student loan debt on average, USA Today reports. That’s a record in the U.S., according to the report.
While parents weren’t likely to talk to their teens and young adults about student loan debt management, they were slightly more likely to discuss planning for retirement, with about 13% of parents discussing it, according to the recent study.
Meanwhile, about 78% of parents discussed saving money and 52% talked about budgeting, the survey found.
“It’s great to see that most parents are talking with their kids about saving and budgeting,” Tim Harris, executive vice president at COUNTRY Financial, said in a press release. “However, planning for retirement and managing student loans are equally if not more important topics to discuss with your kids. Take simple steps such as enrolling in online courses, community classes or visiting a representative to educate yourself fully on these topics and prepare your kids for a more financially secure future.”
Managing student loans: What students need to know
Ready to have this important discussing with your child? Consider these key topics to cover. To learn more, visit studentloans.gov.
- Loan options. There are many loan programs available – from federal student loans with low interest rates and more flexible terms, to private loans and even loans that parents take out. Start your research early.
- Payback terms. A variety of repayment programs are available, depending on the type of loan you have. This includes income-based repayment, which can help make payments more affordable early in your career.
- Budgeting basics. Student loan payments may be just one of many bills your child will have to manage once they’re on their own. Teach them budgeting basics early (find ideas for high-schoolers here).
- Other ways to pay. Make sure your student knows that student loans aren’t the only way to pay for college. Explore all the available options before you sign the dotted line, like work-study programs and scholarships.