What Sallie Mae study reveals about online learning, free student aid applications

Families and students admit to barriers with FAFSA, struggles with planning for life after higher education.
By: | November 23, 2021
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Each year, loan servicer Sallie Mae releases a study called How America Pays for College that reveals the ways students and families are managing the costs of higher education. During the pandemic-affected 2020-21 academic year, a few key trends emerged.

Borrowing fell overall (12%) as did the number of students and families who applied for the Free Application for Federal Student Aid (FAFSA). The majority admitted they are planning earlier for college and helping pay for it while students are attending but struggling to weigh post-college options.

Included in its latest survey of 985 parents and 1,000 students is how those groups reacted to the infusion of online learning necessitated by COVID-19. Though many were skeptical of its value as the pandemic hit, more than 85% said they had a “positive” or “neutral” experience with it, and more than half rated it as “good” or “excellent.” Those numbers were even higher among Blacks and Hispanics, who cited the speed to completion, the ability to attend an institution outside of their area and the effectiveness of learning as benefits of fully online or hybrid modalities.

“The pandemic may serve as a catalyst for innovation to enhance how colleges and universities deliver education to the many communities they serve, and it may be a driving force in creating more equity in higher education,” study authors said. “Opportunities and benefits of online learning in reaching minority students may be clear, but there are still obstacles: 28% of Black and 20% of Hispanic families report not having access to all the tools and technology needed for online learning.”

Huge barriers still remain to online implementation, notably slow or poor internet connectivity experienced by a third of respondents. More than half admit they found the online space distracting, and a similar percentage said it was not the best environment to try to work with or meet up with other students. More than a third say the courses themselves simply aren’t tailored to online spaces and that instructors failed to adapt well to virtual instruction.

As a result, 75% were happy that campuses reopened, either for full instruction or hybrid learning. But the acceptance by 70% of Black students that online learning was on par with face-to-face instruction is notable.

Cost for students and families

Another key data point from the study is the alarming freefall in the number of students filing FAFSA forms. The percentage dipped again in 2020-21 to 68%, a nearly 10% drop from 2018-19 and an 18% decline since 2016-17. The No. 1 reason they don’t apply is that they feel they won’t qualify. Around one-third said they failed to hit deadlines or felt it was overly complex. “Similarly, many students didn’t apply for scholarships because they didn’t think they’d receive one,” the authors said. “Exploring and addressing families’ rationales for not taking advantage of these funding sources may encourage them to apply and not miss out on valuable free aid.”

Families shelled out a little more than $26,000 for education during 2020-21, a drop from $30,000 the previous year. Scholarships (16%) and grants (9%) remain key funding sources, but not as large a percentage as might be expected, given the rises in costs of tuition and fees and the stagnation of incomes. Nearly 75% of families who didn’t utilize scholarships didn’t even apply for them. Other sources include:

  • Parent income and savings: 45%
  • Student borrowing: 11% (average of $8,775)
  • Parent borrowing: 9% ($11,394)
  • Student income and savings: 8%
  • Relatives and friends: 2%

Families understand well the costs incurred through loan borrowing from previous generations–where $1.73 trillion in student loan debt hangs over past students–and are trying to pay those costs down earlier. Around 55% say at least some student loans are being paid while they are attending college, which is 10 percentage points higher than in 2019-20.

Still, only 38% of families and students have talked about post-college options and savings, including how lucrative their career paths will be when they graduate and the potential for post-graduate studies. Those data may provide key opportunities for admissions and career services centers in ensuring students are retained, gain completion and are successful long term.