NEWARK, Del.--(BUSINESS WIRE)--Eighty percent of families are confident in how they paid for college and nearly half have a plan to pay for all years of college, according to “How America Pays for College 2019,” the national study from Sallie Mae® and Ipsos, an independent global market research company. On average, families spent $26,226 on college in academic year 2018-19, with a sizeable portion of costs covered out-of-pocket through income and savings.
Family income and savings paid 43% of college costs, scholarships, grants, and gifts— used by 82% of families—covered 33% of costs and borrowing covered 24%. Fifty-seven percent of the families who borrowed to pay for college had always planned to do so as part of their paying-for-college strategy. Thirty-eight percent of families reported the student borrowed and 21% reported a parent borrowed to pay for college in academic year 2018-19. Of those who used federal student loans, 27% expect their loans to be forgiven.
“The ‘free money’ they get from scholarships and grants is especially important for many students and opens doors that may otherwise be unavailable to them,” said Jennifer Berg, senior researcher, Ipsos. “Having that money can make a big difference in their experience at college, how they view their education, and even in their ability to attend at all.”
When it comes to paying back student loans, one-third of families agree it will be a shared responsibility between the student and parent. Sixty-four percent of families say the student will be solely responsible for paying back their student loans. Even further, 75% of families expect students to help pay back parent loans. Many families are getting a head start on paying back loans. Forty-one percent are making payments on student loans while the student is in school.
Seventy-seven percent of families completed the Free Application for Federal Student Aid (FAFSA) for the 2018-19 academic year. Of those who filed for the 2019-20 academic year, 25% did so in October, the first month the application is available, with the majority waiting until January or later, potentially missing out on free money for college. Completing the FAFSA is the first step in receiving a financial aid award letter from schools. Only 42% of families, however, are completely confident they understood the award letter they received.
Ninety percent of families agree college is an investment and 71% of families say the price they are paying is fair for the education received. That said, 79% of families eliminated a college from consideration at some point in their selection process due to cost.
“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, Sallie Mae. “While more families are planning, we’d like to see that number continue to grow because we know those with a plan are better prepared to meet the costs of college, and they have a better understanding of the financial aid process. At Sallie Mae, we are committed to providing new tools and educational resources that promote college planning and ultimately help students and families on this path to building prosperous futures.”
“How America Pays for College 2019” reports the results of 2,000 online interviews Ipsos conducted in April and May 2019 of 1,000 parents of undergraduate students and 1,000 undergraduate students between the ages of 18 and 24. Data and years shown reflect academic years defined as July 1 to June 30.
The complete report and a related infographic are available at SallieMae.com/HowAmericaPaysForCollege.
Start your plan for college at SallieMae.com/PlanforCollege.
Sallie Mae (Nasdaq: SLM) believes education and life-long learning, in all forms, help people achieve great things. As the leader in private student lending, we provide financing and know-how to help make college happen and offer products and resources to help customers make new goals and experiences, beyond college, possible. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.
Ipsos is a global independent market research company ranking third worldwide among research firms. At Ipsos, we are passionately curious about people, markets, brands, and society. We make our changing world easier and faster to navigate and inspire clients to make smarter decisions. We deliver research with security, speed, simplicity, and substance. We believe it’s time to change the game — it’s time for Game Changers! Visit http://www.ipsos-na.com to learn more.