Families underestimate cost of college: Fidelity survey

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Pearson CEO Andy Bird on the new Pearson+ subscription service for college students.

A recent survey by Fidelity Investments found that many high school students and their parents underestimate the costs associated with paying for college.  

For the 2020-21 academic year, the average total for tuition, fees and room and board was $22,180 at four-year public colleges and $50,770 at four-year private institutions, according to College Board. Fidelity's survey found that, on average, high school parents expect the annual cost of college to be $22,257.

Roughly one-in-four high school parents surveyed by Fidelity believe the full sticker price for one year of college will be $5,000 or less, far below College Board's estimate, and 38% of high school students said the same. Meanwhile, four in 10 high school students who plan to take loans expect they’ll have a balance of $5,000 or less by the time they graduate, and more than a quarter (27%) of high school parents say they’ll have similarly low parent loan balances.

Approximately 37% of high school parents surveyed said they haven't even started saving for their child's education yet. 

US TO ERASE STUDENT DEBT FOR THOSE WITH SEVERE DISABILITIES 

When it comes to college selection, four in 10 high school students view cost as the "most important" factor.

Fidelity found that more than half (53%) of survey respondents said getting a job that pays enough to support their long-term goals is among their top priorities, whereas only 42% of recent graduates said the same. 

In addition, high schoolers are motivated to secure a job in a field they are interested in or passionate about (55%) and want to set themselves up for a solid and stable career (51%). Nearly one quarter (23%) say getting a job that allows them to give back to their community or the world is a top goal.

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As high school students weigh the cost of college, overall enrollment for the spring semester recently dropped to a new low. 

A June report by the National Student Clearinghouse Research Center found enrollment for the spring semester fell 3.5% from 17.5 million to 16.9 million, a decrease of approximately 603,000 students, seven times worse than the decline a year earlier.

Undergraduate students made up the entire decline, dropping by 4.9%, or over 727,000 students. Meanwhile, graduate enrollment jumped 4.6%, adding more than 124,000 students. Approximately 400,000 fewer male students and 203,000 fewer male students enrolled in college, compared with last spring.

Community colleges were the hardest hit this spring, with a decline of 9.5%, or 476,000 fewer students. 

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Some big-name companies that have dropped college degree requirements for their newest hires in recent years include Google, Nordstrom, Bank of America, Ernst & Young, IBM and Apple. 

TickerSecurityLastChangeChange %
GOOGLALPHABET, INC.2,904.31+10.36+0.36%
JWNNORDSTROM, INC.28.41-0.20-0.70%
BACBANK OF AMERICA CORP.41.19-0.56-1.34%
IBMINTERNATIONAL BUSINESS MACHINES CORP.139.30-1.04-0.74%
AAPLAPPLE, INC.152.51+0.68+0.45%

According to U.S. News World & Report, 2021's top ten highest paying jobs without a college degree include a patrol officer, executive assistant, sales representative, flight attendant, electrician, plumber, structural iron and steelworkers, sound engineering technicians, hearing specialists and brickmasons and blockmasons. 

Median salaries for 2021's top ten jobs range between $53,100 and $61,350 per year.

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