Survey: Inflation Affecting 67% of Parents' Ability to Pay for Education, School Supplies, and Extracurricular Activities
31% of Parents with Children in College or Trade School Taking on a Second Job and 20% Tapping Retirement Savings
DALLAS, Aug. 15, 2023 /PRNewswire/ -- A consumer sentiment survey by ScoreSense® reveals the inflationary economy is affecting 67% of parents with children in grade school through college in their ability to pay for education, school supplies, or extracurricular activities. The survey by ScoreSense, a credit score monitoring product, also found that nearly half of grade school parents plan to use cash and 38% plan to use credit cards to pay for back-to-school supplies and clothing. As prices for higher level education continue to increase, parents are making financial adjustments to their lives to help their children go to college or trade school. The survey findings indicate that 31% of parents are taking on a second job and 20% are tapping into their retirement savings.
The survey coincides with ScoreSense's Q2 Market Report, which examined year-over-year (Q2 2022 vs. Q2 2023) consumer spending habit data. Consumers are applying for and opening less credit as interest rates continue to rise. While credit balances remain high as consumers struggle to pay off their credit cards, there is less credit usage compared to last year as consumers are tightening their spending habits.
"Regardless of the daily economic headlines, the reality is that inflation continues to challenge many U.S. households," said Carlos Medina, senior vice president at One Technologies, LLC, which offers ScoreSense. "Delinquent accounts are up 12% over the second quarter of 2022. While we've seen a little bit of a free fall in the economy over the past year, with rising interest rates and rising inflation, perhaps that decline is slowing, and we may end up with a soft landing rather than a crash-and-burn recession. These figures show that people who may have gotten in over their heads over the past year are finding ways to start chipping away at their debt and tightening their belts to avoid becoming more overextended."
Survey Findings: Parents with children in grade school (Kindergarten – 12th grade)
- Nearly half of grade school parents plan to use cash and 38% plan to use credit cards to pay for back-to-school supplies and clothing.
- Back-to-school expenses, such as supplies, clothing, and uniforms can add up, with 41% of parents expecting to accrue between $100-$399 in debt for it. Another 23% of parents plan to accrue $400-$699 in debt.
- Private tutoring and extracurricular activities (sports, music programs, clubs, etc.) can also get costly. So, 36% of grade school parents are tapping into their savings and 25% of parents are taking on a second job to help fund these activities.
- 46% of parents are limiting their children's extracurricular activities due to financial constraints.
- With private school averaging $12,167 in the United States for grade school, 35% of private school parents are reducing their living expenses, 25% are tapping into their savings, and 21% are taking on a second job to afford the tuition. Public school could be an option for some, with 15% planning to switch to a public school and 29% considering it in the next two years.
- Homeschool parents are significantly more affected by inflation, with 75% saying it affected their ability to pay for their children's education, supplies, and extracurricular activities. The average cost to homeschool is anywhere from $500-$6,000 depending on how a parent structures it. Sixty percent of these parents are significantly more likely to limit their children's extracurricular activities compared to those in public or private school. Almost half (48%) of homeschool parents are tapping into their savings to help pay for extracurricular activities.
Survey Findings: Parents with children in college or trade school
- The average tuition for US private colleges grew by 4% last year to just under $40,000 per year and public in-state school averages $10,500. As these prices for higher level education continue to increase, parents are making financial adjustments to their lives to help their children go to college or trade school. Almost one-third (31%) of parents are taking on a second job and 20% are tapping into their retirement savings.
- 27% plan to pause or reduce their contribution to their retirement plan to help pay for college, while 25% are considering it. Within this group of parents, 47% are very concerned and 50% are somewhat concerned about having enough money to retire.
- Parents are making adjustments. For example, 60% are reducing living expenses and 50% are tapping into savings to help pay for college/trade school.
- 40% of college parents plan on spending about $10,000-$50,000 on tuition and school expenses while 20% plan to spend $100,000 or more to help their child complete college or trade school.
- Food and meal plans top the list at 74% of school expenses parents will help pay for, followed by tuition at 66%, and car payments/insurance/fuel at 52%.
- While 65% plan to pay for college tuition and expenses through typical bank accounts, 39% are using college savings funds.
- 28% of kids apply for less expensive colleges than the one desired due to financial concerns.
About One Technologies
One Technologies, LLC, harnesses the power of technology, analytics, and its people to create solutions that empower consumers to make more informed decisions about their financial lives. The firm's consumer credit products include ScoreSense®, which enables members to seamlessly access, interact with, and understand their credit profiles from all three main bureaus using a single application. The ScoreSense platform is continually updated to give members deeper insights, personalized tools, and one-on-one customer care support that can help them make the most sense of their credit. One Technologies is headquartered in Dallas and was established in October 2000. For more information, please visit onetechnologies.net.
Media Contact:
Scott Tims
stims@piercom.com
SOURCE ScoreSense
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