When it comes to the cost of a college education, some students are getting more than they bargained for.
A new survey from Ascent Student Loans, a student loan provider, found that 47 percent of students are shelling out more money for their education than they expected and over 60 percent are responsible for more than half of their total education costs.
At the same time, 51 percent of students said they do not believe the value of their education is keeping pace with what they are paying.
Those sentiments come as many students run into some unpleasant surprises as they pursue their degrees, according to Ken Ruggiero, chairman and CEO of Goal Structured Solutions, the administrator of Ascent Student Loans.
One common situation is when parents are not able to co-sign a loan, Ruggiero said.
A parent who has a 680 credit score may sign be able to co-sign in the beginning of a student’s college career. But each time they co-sign for a loan their credit score may go down as they incur more debt. That can be accelerated if they have more than one child in college, Ruggiero said.
Once their score drops to 660, many institutions will no longer lend to them.
Another situation that occurs frequently is when parents just do not have the money to cover all of the tuition bill. That shortfall could be as little as $2,000 or $5,000, Ruggiero said.
“Sometimes it’s not a lot of money in the big picture in terms of tuition, but it’s money they just don’t have,” Ruggiero said.
That puts pressure on the student to find the money to make up the difference or they do not return to school.
“If you look at why students drop out of school, the number one reason is not grades,” Ruggiero said. “The number one reason is they couldn’t afford it.”
The May survey included 1,027 college students who are pursuing a four-year bachelor’s degree and have student loans.
