As a university leader, you’re well aware of how families are paying for college. The annual “How America Pays for College 2024” report from lender Sallie Mae breaks down some of the finer details.
Overall, families reported spending $28,409 on the 2023-24 academic year, which is only a few hundred dollars higher than 2022-23. They paid nearly half with income and savings, according to Sallie Mae and survey partner Ipsos.
There was also clear evidence that families struggled with the glitch-ridden rollout of this year’s supposedly simplified FAFSA form. Three-quarters of families surveyed filled out the 2023-24 FAFSA and of those who filled the form out this year, only three in 10 said it was easier to complete.
More from UB: This year’s FAFSA delayed until Dec. 1 to ensure successful rollout
Families also reported being stressed out by the FAFSA delays and seeking out other sources of financial aid. Small numbers even transferred to another college or university or considered switching to a lower-cost school.
Families also had some definite thoughts on financial aid offers: An overwhelming majority would prefer to receive “a simplified, standardized letter,” the study noted.
“The study reveals a significant trend: families are increasingly recognizing the importance of financial planning for college,” said Jennifer Berg, vice president of Ipsos. “Nearly six in 10 families now create a comprehensive plan to cover all years of college before enrollment, a notable increase compared to five years ago. This proactive approach not only boosts confidence in their financial decisions but also equips them to navigate economic uncertainties more effectively.”
‘Willing to stretch’ when paying for college
The report also delved into perceptions of the value of higher ed and found nearly nine in 10 families believe college is a worthwhile investment and almost as many “are willing to stretch financially to get there,” the report found. Here’s what else the survey revealed about family borrowing:
- 49% borrowed for college (up from 41% last year)
- Borrowing covered 23% of costs (up from 19% the prior year)
- 43% considered attending more expensive schools because of access to loans
- 48% of students expect their federal loans to be forgiven
- 40% of families discussed who would be responsible for paying back loans.
“More clarity around the actual costs of college, greater transparency in federal lending programs and better efforts to connect students with grants and scholarships would go a long way in helping families make informed decisions about where to go to school, and whether and how much to borrow for higher education,” said Rick Castellano, vice president of Sallie Mae.
Eight in 10 students received scholarships covering 27% of families’ expenses. But the study also revealed some confusion about scholarships: More than half of families thought only students with exceptional grades or abilities are eligible for scholarships. Among families who didn’t apply for scholarships:
- 50% cited a lack of awareness
- 32% doubted winning
- 21% shied away from the effort required.
As with just about every other sector of society, artificial intelligence is having an impact on the college planning process. About a quarter of students used AI in the application or decision-making process while about three in 10 families used it to research financial aid or scholarships.
