7 in 10 parents spent more on college tuition and fees than they expected, survey finds

It's widely known that a college education can come with a staggeringly high price tag. Still, the vast majority (70%) of parents of college students spent more on college tuition and fees than they had expected, according to a new survey by College Ave Student Loans. 

Two-thirds (66%) of college parents said that figuring out how to pay for college was the most stressful part of the college planning process, but it doesn't have to be this way. With a little bit of research and the right financial products, paying for college expenses can be simpler than you think.

Keep reading to learn more about how to finance your child's higher education costs, and visit Credible when you're ready to see your estimated private student loan interest rates. 

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3 ways high school seniors and parents can prepare for college costs

Nearly 80% of parents have set aside some money to help pay for their child's college expenses, but only 64% feel comfortable with the amount they've saved so far. Just over a quarter of parents have saved enough to pay for their child's education in full, while the rest will need to rely on other forms of financial aid like loans and scholarships to finance college expenses.

Here are a few things high school seniors and their parents can do now to prepare for the cost of college:

1. Estimate your college expenses. College tuition and fees are just a portion of the total cost of attendance. You'll need to consider paying for room and board as well as meal plans, groceries, toiletries and other living expenses.
2. Fill out the FAFSA form. The Free Application for Federal Student Aid (FAFSA) enrollment period for the 2022-23 academic year is now open. This helps you determine your eligibility for federal student loans, grants and work-study programs.
3. Research all your borrowing options. Federal Direct loans have borrowing limits, depending on if the student is independent or dependent. Parents can consider borrowing federal Direct PLUS loans or private loans to bridge the financing gap when federal student aid comes up short.

If you decide to take out private student loans to help pay for college, be sure to compare repayment options across multiple banks and lenders before you borrow. You can check your student loan rate without impacting your credit score on Credible. Then, use a student loan calculator to estimate your monthly payments to see if private parent loans are right for you.

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Parent PLUS loans vs. private student loans

Parents of college students commonly use federal Direct PLUS loans or private parent student loans to bridge the financing gap if federal student loans aren't enough to cover the cost of college. Here's what you should know about these types of loans:

• PLUS loans are issued by the federal government and come with fixed interest rates that depend on the year in which they were borrowed. For the 2021-22 academic year, the interest rate on a parent PLUS loan is 6.28% plus a one-time 4.288% loan fee.
• Private student loans are issued by banks, online lenders and credit unions instead of the government. Interest rates vary based on the loan length and amount, as well as a borrower's creditworthiness. Creditworthy borrowers may qualify for lower rates on a private student loan than what's offered by parent PLUS loans.
• Since PLUS loans are federal loans, they're eligible for certain borrower protections like administrative forbearance, income-driven repayment plans and student loan forgiveness programs like Public Service Loan Forgiveness (PSLF). On the other hand, private student loans are not eligible for federal protections.

If you're deciding which type of loan you should borrow to help pay for your child's education, check your estimated repayment terms first. You can compare parent student loan rates from multiple private lenders on Credible with a soft credit check, so you can choose the borrowing option with the lower interest rate. 

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