FAFSA (Free Application for Federal Student Aid) is a real uphill battle for many Americans. A new survey finds nearly half of families with students heading to college have saved nothing, but parents remain confident in ability to find funding.
The study also shows parents who seek help with FAFSA and other financing questions place the most trust in a college’s financial aid officer or their own financial advisors, while students turn equally to family members and financial aid officers.
According to the 2018 Allianz Tuition Insurance College Confidence Index, reveals a growing “college savings gap,” as even parents who have saved have only about a third of what they think a four-year degree will cost. Both groups expect to tap outside sources (including those accessible after filing the FAFSA.) to cover 40% of the balance, a significant increase from 2017.
Allianz Tuition Insurance surveyed 1,000 current and prospective students and 1,000 parents on perceptions and actions linked to college preparedness and overall confidence. Most parents surveyed (71%) felt confident in their ability to pay for their children’s college education, though the 2018 data revealed several areas in which families seem to fall behind. This also pointed to opportunities for financial professionals to offer more hands-on guidance.
FAFSA FAMILIES ARE CONFUSED
Families struggle to complete the FAFSA application.
Thirty-seven percent of parents and 41% of students found the FAFSA process confusing. Of those parents who sought FAFSA support, 25% went to college financial aid officers, and 57% of students consulted their parents. However, more than 40% of parents and 31% of students did not seek advice about planning for college costs.
FAFSA FAMILIES HAVE LITTLE SUPPORT
Financial aid officers are the top information source for families planning to pay for college.
Parents who requested guidance trust financial aid officers (88%) and financial advisors/planners (86%) over family members. Further, 85% of students place equal trust in family members and financial aid officers.
COLLEGE SAVINGS GAP EXPLODING
Many parents (44%) and prospective students (45%) haven’t put aside any money to finance higher education. Overall, parents saved an average of $12,937 (down 12% from $14,690) and students saved an average of $7,800 (up 17% from $6,678). However, families expect a four-year program will cost more than $61,000.
Methodology: These are some of the findings of an Ipsos poll conducted on behalf of Allianz Global Assistance in April 2018. For the survey, a sample of n=2,000 Americans (college students age 17-25, prospective n=500, current, n=500; and parents of prospective students 17-25, n=500, and of current students n= 500) were interviewed online via Ipsos’s I-Say panel. Quotas and weighting (by gender and region) were employed to ensure that the sample’s composition reflects the overall population according to census information. The precision of Ipsos online surveys is measured using a Bayesian credibility interval. In this case, with a sample of this size, the results are considered accurate to within ± 2.5 percentage points, 19 times out of 20, of what they would have been had all parents and students in America been polled. The credibility intervals are wider among subsets of the population.
Allianz Global Assistance USA (AGA Service Company) is a leading consumer specialty insurance and assistance company.