Nearly two-thirds of teens are changing their college plans due to the economy, according to a new survey.
The survey, by Junior Achievement and Allstate, found that 63 percent of the 1,000 teenage males and females polled indicated they had changed their college plans because of the economy, up from 55 percent last year.
Included within the 63 percent whose college plans have changed, 41 percent are working more to pay for college, 37 percent are staying closer to home or are not attending college out of state, 21 percent plan on going to a community college and 15 percent may delay school for one year or longer.
Economic pressures and steadily increasing tuition are forcing teens and their families to exercise financial discipline to pay college costs. An overwhelming majority of teens 90 percent report they and their families are saving for college, with 53 percent of those teens saving their own money and 83 percent reporting their parents are saving for their college educations. However, a quarter (25 percent) hasn't determined how they will pay for college.
Interestingly, 86 percent of teens say they plan on getting college scholarships. Yet, only 66 percent of all undergraduates received some type of financial aid in 2007-08, including grants, loans and scholarships, according to the U.S. Department of Education (the most recent year for which information is available). Those who miss out on financial aid opportunities will be left with tough financial decisions to make.
Of those students who do receive some type of financial aid, U.S. Department of Education data show that the median amount of student-loan debt carried by 2007-08 bachelor's degree recipients at public four-year colleges was $17,700 and $22,375 at private four-year institutions.
This debt level has taken its toll on students' ability to repay their loans, as evidenced in the rise of student-loan default rates. The latest data from the U.S. Department of Education show that default rates are up from 5.2 percent in 2006 to 6.7 percent in 2007. Nearly 7 percent of college graduates default on their student loans.
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