The seemingly-endless rise in college tuition along with the unstable economic recovery and stagnate wages has made the battle to save for college tough on families.
According to the Federal Reserve, student loan debt stood at $956 billion in November, an increase of $42 billion from the previous quarter. What’s more, the delinquency rate for student loans is around 10 percent.
“When you look at consumer debt, 76 percent of it is tied to housing and the next biggest category is student loans,” says John Kenney, head of Legg Mason Global Asset Allocation. “With all the default issues, it’s a good example of how pervasive student loan debt is and how important is to find a way to plan for it.”
Whether it’s because they underestimate the cost of college or they overlook cost-reduction strategies, parents and students are increasingly taking out large loans to help finance higher education. Legg Mason polled more than 1,000 parents to identify the top five reasons parents aren’t saving enough for college.