Footing the bill
More and more families have a plan to pay for college
3
StatePoint
College might be getting more expensive,
but new research suggests
that more families are preparing to
meet those costs one way or another.
Eighty percent of families say they are
confident in how they paid for college
last year, and nearly half have a plan to
pay for all years of college, according to
“How America Pays for College 2019,” a
recent study from Sallie Mae and Ipsos,
an independent global market research
company.
All this preparation could be attributed
to the fact that the overwhelming
majority of families recognize the value
of higher education, with 90 percent of
families agreeing college is an investment.
“The individual and socio-economic
benefits of a college education are clear,
so it’s particularly gratifying to see that
families continue to view college as a
worthwhile investment,” said Raymond
J. Quinlan, chairman and CEO of Sallie
Mae.
On average, families report spending
$26,226 on college in academic year
2018-19, with a sizeable portion of costs
(43 percent) covered out-of-pocket
through income and savings.
Scholarships, grants and gifts —
used by 82 percent of families — covered
33 percent of costs.
That “free money” can be especially
important, both logistically and psychologically,
opening doors to opportunities
that would be otherwise unavailable
and even making a difference in the way
students view the college experience as
a whole.
The study also found that while
borrowing covered 24 percent of overall
college costs, 57 percent of the families
who borrowed to pay for college say
they had always planned to do so as part
of their paying-for-college strategy.
What’s more, many families are getting
a head start on paying their loans
back, with 41 percent making payments
on student loans while the student is
still in school.
Families are being proactive in other
ways, too. Seventy-seven percent of
families completed the Free Application
for Federal Student Aid (FAFSA) for the
2018-19 academic year.
Completing the FAFSA is the first step
in receiving a financial aid award letter
from schools.
Of those who filed for the 2019-20
academic year, 25 percent did so in
October, the first month the application
is available.
On the other hand, the majority of
families waited until January or later
to file, potentially missing out on free
money for college.
For the complete report and a related
infographic, visit SallieMae.com/
HowAmericaPays.
For new tools and educational resources
that promote college planning,
visit salliemae.com/college-planning.
“While more families are planning for
college costs, we’d like to see that number
continue to grow because we know
those with a plan are better prepared
to meet the costs, and typically have a
better understanding of the financial aid
process,” Quinlan said.