A robust 88% of undergraduate students say that the cost of higher education is worth it. But how they will pay for it remains their No. 1 concern.
With Decision Day looming Saturday and many students finalizing their college plans, the piece of the puzzle that can handcuff them now and in the future – finding the funds to cover the next few years of studies – is gaining attention during the second year under the COVID-19 pandemic.
Colleges and universities must be aware of this factor and consider that cost will be a key component for 74% who will make their decisions.
According to new data shared by Barnes & Noble College Insights and College Ave Student Loans, 68% of the 1,000-plus students they recently surveyed say they know how they will pay for college.
Nearly 70% admit that parent savings will provide a major assist, as will scholarships and grants. Students will be big contributors as well, with 43% noting their own savings and income will help offset college costs. More than half will be putting in up to $5,000.
“The survey highlights the incredible commitment students make to investing in their potential and future,” said Joe DePaulo, CEO and Co-Founder of College Ave Student Loans.
Student loan costs
That commitment also includes student loans.
More than 40% of those surveyed plan to take out loans to help them defray costs. That’s not new but is a concern, especially given that studies have shown that around 40% of students don’t make it to completion after enrolling and many are saddled with debt once they do graduate. Student loan debt in the United States has grown to $1.5 trillion, or an average of $30,000 per borrower.
There have been continued calls to help ease that burden – including pitches from several senators including Bernie Sanders and Elizabeth Warren to eliminate all or large portions of that debt – though so far there has been no formal proposal from the Biden Administration. The President’s team did not address relief in either his infrastructure plan or his most recent American Families Plan, though there are several other items contained in it that might help borrowers if it is passed.
One is an expansion of Pell Grants by $1,400 to lower-income students who qualify. Another is the inclusion of two-year free community college for all students. A third is billions in supports and assistance for universities to help retain and graduate students, including Historically Black Colleges and Universities, Tribal Colleges and Minority-Serving Institutions.
In an attempt to bridge those gaps now, colleges and universities who are seeing application and enrollment numbers fall (the National Clearinghouse Student Research Center noted in its latest spring report that enrollments have declined some 4.2% since the start of the pandemic) have frozen or lowered tuition or offered other incentives such as housing discounts, to attract students.
Lending a helping hand
Though the majority of students from the survey believe they can handle repayment of loans, more than 40% also said they would seek out jobs that would help them pay back those loans.
To further help prospective and new students stay on a path of financial strength, colleges and universities can help by:
- Being transparent about pricing when it comes to tuition costs and fees. Ensure that information to prospective students is also being updated on websites that students and parents are expected to frequent, such as U.S. News and World Report.
- Being clear in all financial aid documentation and dialogue about offers are to students, spelling out the differences between grants and loans, as well as private scholarships. Also consider providing institutional aid in addition to private scholarships to entice students further. All students should receive a complete breakdown of costs of their tenure at the institution.
- Promoting to all students and parents the importance of annual filings of FAFSA forms, with reminders of deadlines on social media, websites, texts and other forms of communication that will reach them.
- Considering lowering fees and other costs on campus.
- Encouraging the use of e-books and open educational or free resources by faculty to offset traditional costs of printed materials for students.