Student loans

College costs remain a sore spot despite student loan relief

Growing numbers of American families have had to save for their children’s education despite pandemic-era student loan relief, new data shows

Research released Tuesday by Fidelity Investments and viewed by FOX Business indicates that American parents are losing ground in their quest to save for college, with only 27% of parents surveyed on track to cover expected college costs. education of their children, a decline compared to recent years .

A new study from Fidelity Investments indicates that American families are struggling to save enough for higher education. (Alex Tai/SOPA Images/LightRocket/Getty Images)

“Study finds that while parents are less concerned about the impact of COVID-19 on their savings strategy, there is a new wave of worries keeping them up at night – inflation and volatility market,” said Rita Assaf, Fidelity vice president for retirement and college.

Eighty-one percent of respondents said they were worried about the impact of recent market volatility on their college savings, up from 74% in 2020. Many are struggling to save, and nearly one third parties told researchers that they always reimburse their own costs. student debt and haven’t started saving for their children’s education.

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Report shows college is parents’ top savings priority and they’re continually increasing the amount they plan to contribute as college costs continue to rise, but many still fall short .

Fidelity said the ongoing federal pause on student loan payments since the early days of COVID-19 has brought some relief to parents, with 49% saying they are not making any payments on existing loans.

President Biden's Student Loan Relief

President Joe Biden, left, speaks about canceling student debt at the White House in Washington on August 24, 2022. (AP/Evan Vucci/AP Images)

President Biden announced last month that the student loan suspension would be lifted at the end of the year, and he took executive action to forgive between $10,000 and $20,000 in student loan debt for eligible borrowers. current ones for additional relief.

But future borrowers won’t benefit from the break, and some experts say the president’s paper will only drive up the cost of higher education even more, making it even harder to save enough for higher education.

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The cost of a college education has already increased by several times the rate of inflation over the past five decades.

student loan

The cost of a college education has soared several times the rate of inflation over the past 50 years. (istock / iStock)

Using data from the nonprofit College Board last year, an analysis by My eLearning World found that the average cost of going to a private college — including tuition, fees, books, and room and board – increased from $2,930 per year in 1971 to $51,690 in 2021. This represents an increase of approximately 4.6 times the rate of inflation.

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The price of public colleges has also increased, from $1,410 per year in the early 1970s to $22,690 for in-state students and $39,510 for out-of-state students. last fall.