Most Chicago parents say they're paying at least half of kids' college tuition
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Nearly all Chicago parents expect to pay for at least half of their children's college tuition, per a new study from Northwestern Mutual.
The big picture: 96% of Chicago parents said they plan to pay for half, compared with 95% nationally, according to Northwestern Mutual's 2024 Planning & Progress Study.
Why it matters: If parents are dipping into future savings to pay their children's tuition, it could put the burden back on kids if aging parents are unable to afford retirement, Northwestern Mutual financial advisor Ben Voigt says.
By the numbers: About 29% of Chicago adults polled say they expect to pay the full cost of their kids' higher education.
- 37% expect their kids to pay up to a quarter, and 30% want their kids to foot half the bill.
- Parents estimated their kids' college education could cost nearly $80,000 but might vary based on school, scholarships and living arrangements.
- More than 20% of Chicago adults are saving for college either for themselves or someone else.
Yes, but: Student debt is not "bad debt," Northwestern Mutual's Christian Mitchell says in the report, as a college degree potentially leads to greater income-earning potential.
What they're saying: "In Illinois, research shows that over the past decade, the average resident is earning higher pay and has a better education compared to years past, suggesting parents understand the value of higher education and prioritize helping their children with the financial burden," Voigt says.
Zoom in: From 2019-23, Chicagoans' personal debt, not including mortgages, decreased, but since last year it's gone up 4%, to $22,189 from $21,000. About two-thirds of local residents have debt.
- The top form of debt for that same group is credit cards, second most common is car loans, and third is student loans.
- Nationally, 42% of Gen Xers and 43% of millennials say in the survey they're carrying more debt than ever and don't have specific plans to pay off debt.
- These age groups most likely still have kids at home, and retirement is sufficiently far off to delay saving a while.
What's next: Experts at Northwestern Mutual encourage parents to come up with a college spending plan for kids sooner rather than later. Student loans should be an option, but retirement loans are not, experts say.