Despite all the news around millennial debt, the fastest-growing group of student debt carriers isn’t millennials at all—it’s their parents.
Born roughly between 1946 and 1964, Baby Boomers control over two-thirds of the disposable income in the U.S, and despite being saddled with their children’s debt, they remain uniquely optimistic about the American educational system.
A recent study by Laurel Road discovered that parents in this demographic overwhelmingly prioritize their children’s educational needs (78%)—so much so that they sacrifice their own personal milestones in order to finance their child’s chosen path of education. An admirable 82% of parents surveyed also believe that young people should pursue their career passions over their earning potential.
We might chalk this up to the post-war generation’s optimism. Even in the face of their child’s outsized salary expectations and daunting tuition bills, they continue to lean on the data that degree-holders earn substantially more in the job market. Furthermore, both students and parents deprioritized starting salaries as a ranking factor for which degrees to pursue—only 3% and 2%, respectively, marked it as important.
Fortunately, the optimism and support has not gone unappreciated. 95% of the students surveyed whose parents made financial sacrifices on their behalf tried to lessen the burden on their parents. Some reported buying or borrowing used textbooks or taking on a side hustle, while others focused on getting a job that pays more despite being outside their interests.
Students also showed to be more sensitive to cost, ranking it as the top consideration when choosing a college, while parents considered a degree or program’s quality to be paramount. Across the board, the data revealed a deep appreciation from both parent and student in ensuring the latter receive the best overall educational opportunity while keeping costs as low as possible: “Not only do we see a sense of mutual responsibility for the cost of education throughout this data set, but the findings truly personify the empathy and gratitude felt amongst students for their parents’ contributions to help them pay for college,” says Alyssa Schaefer, CMO of Laurel Road.
And the gratitude didn’t end at cost-cutting. If they won the lottery, 60% of students surveyed would pay their parents back first, instead of buying themselves a house. Clearly, the ever-increasing financial challenge of granting a child a top-tier education in the U.S., coupled with the unwavering belief in higher education from parents across the nation, has fostered greater appreciation and responsibility on both sides. At Laurel Road, we welcome this news as an opportunity to open deeper discussions around financial responsibility and a better future for higher education. We are proud of our many current and former parent and student borrowers who’ve benefitted from refinancing, among other substantial efforts, to achieve greater financial freedom and keep their dreams alive. Thank you for letting us be a partner and trusted support in your journey.
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