Financial Institutions Can Target College Tuition Payers With Loan Packages

BY Rachel Cagle
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According to the 2018 Allianz Tuition Insurance College Confidence Index, roughly 40% of families find the Free Application for Federal Student Aid (FAFSA) challenging to complete; a troubling statistic considering the growing number of families saving nothing for college. The index reveals a growing "college savings gap," as even parents who have saved have only about a third of what they think a four-​year degree will cost. Both groups expect to tap outside sources (including those accessible after filing the FAFSA) to cover 40% of the balance, a significant increase from 2017.

According to AudienceSCAN, College Tuition Buyers are 130% more likely than other adults to purchase investment properties and 134% more likely to purchase gold or silver as investments. While meeting with their wealth financial advisor for these processes, they can easily be influenced to also seek help with their potential college tuition financial problems from their advisors.

The index also shows that parents who seek help with FAFSA and other financing questions place the most trust in a college's financial aid officer or their own financial advisors, while students turn equally to family members and financial aid officers. 

Allianz Tuition Insurance surveyed 1,000 current and prospective students and 1,000 parents on perceptions and actions linked to college preparedness and overall confidence. Most parents surveyed (71%) felt confident in their ability to pay for their children's college education, though the 2018 data revealed several areas in which families seem to fall behind. This also pointed to opportunities for financial professionals to offer more hands-​on guidance.

Families struggle to complete the FAFSA application.

Thirty-​seven percent of parents and 41% of students found the FAFSA process confusing. Of those parents who sought FAFSA support, 25% went to college financial aid officers, and 57% of students consulted their parents. However, more than 40% of parents and 31% of students did not seek advice about planning for college costs.

Financial aid officers are the top information source for families planning to pay for college.

Parents who requested guidance trust financial aid officers (88%) and financial advisors/​planners (86%) over family members. Further, 85% of students place equal trust in family members and financial aid officers.

The College Savings Gap is growing.

Many parents (44%) and prospective students (45%) haven't put aside any money to finance higher education. Overall, parents saved an average of $12,937 (down 12% from $14,690) and students saved an average of $7,800 (up 17% from $6,678). However, families expect a four-​year program will cost more than $61,000.

"This year's College Confidence Index draws a clearer picture of how many people overlook opportunities to manage one of the most important investments of their lives," said Daniel Durazo, Marketing and Communications Director at Allianz Global Assistance. "The data indicates financial aid officers at higher education institutions are an important ally for families, especially for those without access to financial advisors. A college financial aid officer can serve a critical role, helping families navigate costs, financing, and, in many situations, options for protecting their investment such as tuition insurance."

Both colleges and financial advisors can promote their ability to aid with College Tuition Buyers' FASFA process, as well as any other financial speed bumps they may encounter before graduation. One good method of outreach is email. According to AudienceSCAN, 60% of College Tuition Buyers took action after receiving an email ad last year. This group is also 42% more likely than other adults to take action after seeing a text link ad on a website and 59.3% took action after seeing an ad on a daily deals website last year. Don't write off traditional though. Good ol' TV commercials drove 71.2% of this audience to action last year.

AudienceSCAN data is available for your applications and dashboards through the SalesFuel API. Media companies and agencies can access AudienceSCAN data through the AudienceSCAN Reports in AdMall.