ApplyWise.com and NextStepU Survey Finds 56% of Families with College-Bound Teens in Worse Financial Condition than Two Years Ago

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As high school seniors prepare to complete college applications, a survey conducted by online college admissions counseling service ApplyWise.com and media company NextStepU shows the majority of families polled are going to struggle harder than ever to pay for their child’s college education. Parents polled by NextStepU and ApplyWise.com say higher education is a priority, but 22% of respondents have not saved money toward child’s college tuition. When selecting schools, parents say they are now less influenced by a college’s reputation and the look and feel of the campus, and more likely to select a school based on the availability of financial aid.

When asked to select the factor that has the greatest influence on their child’s college decision, the number one answer in both 2010 and in 2008 was the academic programs offered. The cost of tuition and fees came in second.

As high school seniors prepare to complete college applications, a survey conducted by online college admissions counseling service ApplyWise.com and media company NextStepU shows the majority of families polled are going to struggle harder than ever to pay for their child’s college education. The survey compared 2010 data with that of a similar survey the companies conducted in 2008. Results indicate that when selecting schools, parents say they are now less influenced by a college’s reputation and the look and feel of the campus, and more likely to select a school based on the availability of financial aid.    

According to the ApplyWise.com and NextStepU survey, 65% of respondents say that economic events over the past two years have changed the way they will pay for their child’s college education. Only 12% of those surveyed in 2010 plan to seek a home equity loan to cover college costs, compared to 27% of parents in 2008. Perhaps because of the high unemployment rate, fewer stay-at-home spouses plan to return to work to help cover college costs. In 2008, 27% of stay-at-home parents planned to go back to work, this year, that figure is down to just under 16%. Teens, however, may be working harder than ever to pay for college. In 2010, 12.5% of parents report their child will have to pay their own way through college, up from 8.6% in 2008.

Despite the struggle to pay for college, parents think that college education is a worthwhile investment. While 59% think a college degree is important to one’s career success regardless of the state of the economy, 35% of parents polled say that because of recent economic events, it’s more important than ever to have a college degree in order to earn a living.

“Families are seeking a balance that will enable their child to get the best education possible and stretch their dollar the farthest,” said Katherine Cohen, PhD, Founder and Co-CEO of ApplyWise.com. “When asked to select the factor that has the greatest influence on their child’s college decision, the number one answer in both 2010 and in 2008 was the academic programs offered. The cost of tuition and fees came in second. Families want education to be a priority, even during tough economic times.”

According to the 2010 survey, 33% of parents said it is likely their child will attend a community college for two years and transfer to a four-year school. In 2008, only 13% of parents said that was a likely option.

“We were not surprised that parents still believe in the value of a college education. However, we were taken aback that 22% of parents have not saved any money toward their child’s college education and that another 20% say they have saved less than $5,000,” said Enid Arbelo, editor-in-chief of NextStepU Magazine. “Americans currently owe $800 billion in student loans and the default rate is rising. Those numbers are sure to go up.”

Almost 44% of parents responding to the 2010 poll said government and private student loans will be a source of funding for their child’s college education.

Key Findings of the ApplyWise.com and NextStepU 2010 Survey

-College savings – 22.1% say they have saved nothing for their child’s college education and 20.6% have saved less than $5,000. 14.7% have saved between $10,001 and $25,000.

-Degrees of success – 59.2% of respondents say the economic downturn has not affected their view of the value of a college education – it’s an important factor in career success. 35.2% say that because of recent economic events, they perceive a college degree to be even more important. Only 4.8% think a person can be equally successful without a degree.

-Ranking colleges – Survey results in 2010 and 2008 were consistent when it came to naming the single factor with the greatest overall influence in college choice.

-In 2010, 34.4% ranked academic programs offered as the top priority; in 2008 35.7% picked the same answer.
oCost of tuition and fees was second, getting 28% of responses in 2010 and 27.19% in 2008.
oThe availability of financial aid became more important, rising from 8.6% in 2008 to 17.6% in 2010.
oThe importance of the college’s reputation declined in 2010 to 11.2% from 17.1% in 2008.

-College options – According to the 2010 survey, 33.6% of parents say two years of study at a community college followed by transferring to a four-year school is a likely option for their child, compared with only 13% in 2008. In-state, four-year public colleges remained the most popular option among 52.7% of parents in 2010 and 50.7% in 2008.

-Military service and vocational schools – Entering the military and attending a vocational school both gained favor. In 2010, 6% of respondents said entering the military is a consideration for their child, compared to only 2.9% in 2008. 6.9% of parents indicate that attending a vocational school is a likely option in 2010, versus none in 2008.

-More career options – The 2010 survey showed that more students are reconsidering their planned areas of study. 12.7% of parents polled in 2010 said their child is changing their major to one that might be in higher demand or have more income potential, versus only 4.3% in 2008. This year, 11.1% of students plan to pursue double majors, up from 7.2%
in 2008.

-Financial resources – Scholarships (83.3%) and requiring that their child work while attending college (47.9%) are the two most common steps families plan to take to help pay for college, followed by student loans (43.8%). 16.7% of families say their child will live at home while attending college.

-Financial decline - 56.2% of families report financial situations that are worse now than two years ago. 19% report that a key wage earner became unemployed and 37.2% say their financial condition has worsened because of other reasons.

-Spending cuts – 40.4% of those polled have reduced discretionary spending significantly and 47.1% have cut back a little.

-Family financial chat – 88.3% of respondents report having a serious discussion with their child about the state of the economy and its impact on their family.

The ApplyWise.com and NextStepU survey was conducted online between September 14 and September 22, 2010.

About ApplyWise
ApplyWise (http://www.applywise.com) is the first online college admissions counseling program that includes interactive on-demand counseling sessions and organizing tools to give parents and students everything they need to master the college admissions process. The ApplyWise program was developed by Dr. Katherine Cohen and her team of experts at IvyWise, respected leaders in admissions counseling. ApplyWise is available directly online to consumers and is also used by high school guidance counselors, certified college planners, test prep companies and independent counselors to supplement their own efforts.

About NextStepU
NextStepU (http://www.NextStepU.com) is a national college, career and life planning resource, which reaches more than 4 million readers. NextStepU, publisher of the award-winning NextStepU Magazine, also offers custom print publishing, lead generation and interactive planning tools nationwide.

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Linda Krebs
ApplyWise
212-725-4500 ext. 312
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Enid Arbelo
NextStepU
585 742-1260 ext. 319
Email >
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