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Parents rely heavily on borrowing to pay for college costs: survey

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Federal and private loans are the top methods for making up a savings shortfall to pay for college. (iStock)

Most families plan to do some borrowing to pay for college despite saving for this milestone event, a recent survey said. 

Roughly 42% of families said they planned to rely on federal student loans and 16% said they would use private loans to pay for college, according to the College Ave survey. These parents estimated they would borrow more than $46,000 over four years.  Some families (19%) plan to make up for their college savings shortfall by borrowing up to $68,000 in parent loans.

Besides borrowing, families are also looking at debt-free options to raise cash or cut costs to pay for college. For example, 56% of families are budgeting for four years of schooling, and 10% plan to have their students live at home. Seventeen percent said they planned to take a second job or side hustle to pay for college and 39% said their child would work to help contribute to costs.

“Over and over again, our College Ave survey showcases that funding a college degree is a priority for families,” College Ave Chief Marketing Officer Angela Colatriano said. “With so many resources available to pay for college – like scholarships, grants, income and savings, loans and more – it can feel overwhelming putting the pieces together.”

If you are currently in school or starting soon, and you need more financial aid than what you can receive through the Free Application for Federal Student Aid (FAFSA), consider taking out a private student loan. Visit Credible to find your personalized rate without affecting your credit score.

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Tuition costs more than expected

About 66% percent of college students said college costs were more than they expected and 26% said that these costs rang in at $10,000 or more, according to a different College Ave survey

The cost of higher education remains a significant expense for families who often underestimate the price. Costs have skyrocketed over the last 40 years, even after adjusting for inflation, according to figures reported by the Education Data Initiative

From 2000 to 2020, average post-secondary tuition inflation outpaced wage inflation by 111.4%. Today, students, on average, can expect to pay $26,027 per year to attend a public four-year in-state university. Out-of-state students and those attending a private school typically pay more. 

“Perhaps that’s why the majority report that paying for college is stressful (68%) and, for some, confusing (46%),” College Ave said. “Despite the surprises, stress and confusion, many college students demonstrate a remarkable commitment to their education and find resourceful ways to fund their college education while balancing their personal financial goals.”

Private student loan borrowers can’t benefit from federal loan relief. But you could lower your monthly payments by refinancing to a lower interest rate. Visit Credible to speak with an expert and get your questions answered

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Tips for borrowing smartly

Many families plan to borrow money to shoulder the increasing costs of college. If you plan to take on debt to pay for school, here are some things you should consider in advance to keep it manageable:

Borrow what you can repay

The rule of thumb is not to borrow more than the student’s expected first year’s annual salary.

“Try not to borrow in total more than your child expects to make in their first year’s salary,” according to CollegeAve. “By doing so, you are likely to be able to repay your student loans within 10 years.”

Know your payment amount

Keeping debt manageable requires understanding how much you owe in order to budget. However, 40% of respondents did not know their student loan monthly repayment amount.

Choose repayment terms that make sense  

Flexible repayment options tailored to your needs can help you stay on track with your obligations. Some borrowers choose lower monthly payments over a longer term, while others opt for a shorter repayment term.  

Begin repaying early

Starting the clock on repayment today, no matter how small the amount, can help reduce the total cost of the loan.

If you’re borrowing private student loans to pay for college, it’s important to find a lender who offers reasonable rates, flexible repayment terms and is a provider you can trust. Visit Credible to learn more about private student loan options and get personalized rates from multiple lenders without impacting your credit score.

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Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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Chinese factories stop production, eye new markets as U.S. tariffs hit

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Textile manufacturing workers in Binzhou, Shandong, China, on April 23, 2025.

Nurphoto | Nurphoto | Getty Images

BEIJING — Chinese manufacturers are pausing production and turning to new markets as the impact of U.S. tariffs sets in, according to companies and analysts.

The lost orders are also hitting jobs.

“I know several factories that have told half of their employees to go home for a few weeks and stopped most of their production,” said Cameron Johnson, Shanghai-based senior partner at consulting firm Tidalwave Solutions. He said factories making toys, sporting goods and low-cost Dollar Store-type goods are the most affected right now.

“While not large-scale yet, it is happening in the key [export] hubs of Yiwu and Dongguan and there is concern that it will grow,” Johnson said. “There is a hope that tariffs will be lowered so orders can resume, but in the meantime companies are furloughing employees and idling some production.”

Around 10 million to 20 million workers in China are involved with U.S.-bound export businesses, according to Goldman Sachs estimates. The official number of workers in China’s cities last year was 473.45 million.

President Trump says U.S. met this morning with China, declines to identify individuals involved

Over a series of swift announcements this month, the U.S. added more than 100% in tariffs to Chinese goods, to which China retaliated with reciprocal duties. While U.S. President Donald Trump on Thursday asserted trade talks with Beijing were underway, the Chinese side has denied any negotiations are ongoing.

The impact of the recent doubling in tariffs is “way bigger” than that of the Covid-19 pandemic, said Ash Monga, founder and CEO of Guangzhou-based Imex Sourcing Services, a supply chain management company. He noted that for small businesses with only several million dollars in resources, the sudden increase in tariffs might be unbearable and could put them out of business.

He said there’s so much demand from clients and other importers of Chinese products that he’s launching a new “Tariff Help” website on Friday to help small business find suppliers based outside China.

Livestreaming

The business disruption is forcing Chinese exporters to try new sales strategies.

Woodswool, an athleticwear manufacturer based in Ningbo, near Shanghai, quickly turned to selling the clothes online in China via livestreaming. After launching the sales channel about a week ago, the company said it’s received more than 30 orders with gross merchandise value of more than 5,000 yuan ($690).

It’s a small step toward salvaging lost business.

“All our U.S. orders have been canceled,” Li Yan, factory manager and brand director of Woodswool, said in Mandarin, translated by CNBC.

More than half of production once went to the U.S., and some capacity will be idle for two to three months until the company is able to build up new markets, Li said. He noted the company has sold to customers in Europe, Australia and the U.S. for more than 20 years.

The venture into livestreaming is part of an effort by major Chinese tech companies, at the behest of Beijing, to help exporters redirect their goods to the domestic market.

Woodswool is selling its products online through Baidu, whose search engine app also includes a livestreaming e-commerce platform. Li said he chose the company’s virtual human livestreaming option since it allowed him to get up and running within two weeks, without having to spend time and money on renovating a studio and hiring a team.

Baidu said it has worked with at least several hundred Chinese businesses to launch domestic e-commerce channels after this month announcing it would provide subsidies and free artificial intelligence tools — such as its “Huiboxing” virtual humans — for 1 million businesses. The virtual humans are digitally recreated versions of people that use AI to mimic sales pitches and automate interactions with customers. The company claimed that return on investment was higher than that of using a human being.

Domestic market challenges

E-commerce company JD.com was one of the first to announce similar support, pledging 200 billion yuan ($27.22 billion) to buy Chinese goods originally intended for export — and find ways to sell them within China. Food delivery company Meituan has also announced it would help exporters distribute domestically, without specifying an amount.

However, $27.22 billion is only 5% of the $524.66 billion in goods that China exported to the U.S. last year.

“A few businesses have told us that under 125% tariffs, their business model is not workable,” Michael Hart, president of the American Chamber of Commerce in China, told reporters Friday. He also noted more competition among Chinese companies in the last week.

Tariffs from both countries will likely remain in place at a certain level, with exemptions for certain tariffs, Hart said. “That’s exactly what they’re backing into.”

Products branded and developed for a suburban U.S. consumer might not directly work for a Chinese apartment dweller.

Manufacturers have gone directly to Chinese social media platforms Red Note and Douyin, the local version of TikTok, to ask consumers to support them, but fatigue is growing, pointed out Ashley Dudarenok, founder of ChoZan, a China marketing consultancy.

Looking outside the U.S.

Fewer and fewer Chinese companies are considering diverting exports to the U.S. through other countries, given rising U.S. scrutiny of transshipments, she said. Dudarenok added that many companies are diversifying production to India over Southeast Asia, while others are turning from U.S. customers to those in Europe and Latin America.

Some companies have already built businesses on other trade routes from China.

Liu Xu runs an e-commerce company called Beijing Mingyuchu that sells bathroom products to Brazil. While his business has run into challenges from fluctuating exchange rates and high container shipping costs, Liu said he expects trade with Brazil will ultimately not be that affected by China’s tensions with the U.S.

China’s exports to Brazil have doubled between 2018 and 2024, as have China’s exports to Ghana.

During the Covid-19 pandemic, Ghana-based Cotrie Logistics was founded to help businesses with sourcing, coordinate shipments amid port delays and build dependable logistics routes, said CEO Bright Tordzroh. The company primarily works in trade between China and Ghana and now makes $300,000 to $1 million annually, he said.

The U.S.-China trade tensions have led many companies to explore sourcing and manufacturing locations outside the United States, Tordzroh said, which he hopes can create more opportunities for Cotrie.

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These are 3 big things we’re watching in the stock market this week

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A security guard works outside the New York Stock Exchange (NYSE) before the Federal Reserve announcement in New York City, U.S., September 18, 2024. 

Andrew Kelly | Reuters

The stock market bounce last week showed once again just how dependent Wall Street has become on the whims of the White House.

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These U.S. consumer stocks face higher China risks

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