WASHINGTON – Nearly a quarter of millennials believe that their student loan debt will one day be forgiven, according to a new report by Junior Achievement and PricewaterhouseCoopers.
Junior Achievement CEO Jack Kosakowski tells WTOP he doesn’t know why millennials believe they might not have to repay their student loans, calling them optimistic. But he says that stance and other information gleaned from the report indicate that students and their parents need to make more informed decisions when choosing a college and when deciding how to pay for extending their education.
“They really don’t put much thought into what the costs are,” he says.
Kosakowski says that parents and students need to weigh the return on their investment and whether students will reasonably be able to repay their loans.
The report, which included a survey of 1,000 people aged 14 to 30 taken in May by YPulse, found that one-third of those with student loans are paying more than $300 a month and 5 percent are paying more than $1,000 a month.
Junior Achievement aims to help students prepare for careers with a focus on helping students make smart academic and economic decisions.
The organization teamed up with PricewaterhouseCoopers to develop a free app that parents can use to help plan for college. Parents can plug in their student’s career choice, university type, and how much parents will be able to chip in to determine what percentage of their child’s starting salary would go toward debt repayment, Kosakowski says.
“It’s a real eye-opener for a lot of folks,” he says.
Other findings include:
- 60 percent of millennials say financial aid is the deciding factor when choosing a college.
- 21 percent say college tuition and loans are their top financial concern.
- 50 percent are “very confident” of their ability to pay off their loans – an increase from 2013 when just 40 percent felt that confident.