Just Released ‘How America Pays for College 2024’ Report Finds College Spending Stable with Family Out-of-Pocket Contributions Covering the Largest Share of Cost
August 06 2024 - 10:36AM
Business Wire
Just 29% of Families Who Completed the New
FAFSA® Found it Easier to Complete
Families reported spending $28,409 on college for academic year
2023-24 — in line with $28,026 in 2022-23 — and covered nearly half
(48%) of expenses with income and savings, according to new data in
“How America Pays for College 2024,” the annual study from
Sallie Mae and Ipsos, released today.
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About 3 in 4 families (74%) reported completing the Free
Application for Federal Student Aid (FAFSA®) for the 2023-2024
academic year, but of those who reported completing the new FAFSA®
for the 2024-2025 academic year, just 29% found it easier to
complete. In addition, of those who experienced a delay, 44%
reported experiencing stress waiting for financial aid decisions,
21% sought out additional financial aid options, 14% considered
switching to a lower-cost school, and 10% transferred schools. When
it comes to financial aid offers from schools, 71% of families said
they support a simplified, standardized letter.
Despite FAFSA® confusion and delays, nearly all families (88%)
believe college is an investment in their child’s future, and 79%
are willing to stretch financially to get there. Six in 10 families
(59%) had a plan to pay for college before the student enrolled,
matching an all-time high. Families also reported using artificial
intelligence (AI) technology in the college planning process. About
one-quarter of students (23%) and 18% of parents used AI in the
college application or decision-making process. Three in 10
families (29%) who used AI utilized it to research financial aid or
scholarship options.
"The study reveals a significant trend: families are
increasingly recognizing the importance of financial planning for
college,” said Jennifer Berg, vice president, Ipsos. “Nearly 6 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."
Roughly half of families (49%) reported borrowing for college up
from 41% last year. Borrowing covered 23% of costs, up from 19% the
prior year with federal student loans and parent loans used most
frequently. More than 4 in 10 families who borrowed (43%) said they
considered attending more expensive schools because of access to
loans. Roughly half of students (48%) expect their federal loans to
be forgiven; just 40% of families who borrowed discussed who would
be responsible for paying back student loans.
“Borrowing for college makes sense for some families, but it’s
critical to have a plan and do so responsibly,” said Rick
Castellano, vice president, Sallie Mae. “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.”
Scholarships and grants were used by 80% of families and covered
27% of costs. On average, families reported receiving $8,250 in
scholarships from their schools. However, misconceptions about
scholarships persist. More than half of families (52%) believe
scholarships are only available for students with exceptional
grades or abilities, and families who didn't apply cited lack of
awareness (50%), doubt in winning (32%), and effort required (21%).
To connect more students and families to scholarships, Scholarship
Search by Sallie easily finds and sorts through hundreds of
available scholarships, with no registration required.
“How America Pays for College 2024” reports the results of
Ipsos' online interviews of 1,000 undergraduate students and 1,000
parents of undergraduate students between April 8 and May 14,
2024.
Access the complete report and infographic at
www.salliemae.com/howamericapays.
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 support access to college and offer products and
resources to help customers make new goals and experiences, beyond
college, happen. 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 one of the largest market research and polling
companies globally. At Ipsos, our passionately curious research
professionals, analysts, and scientists have built unique
multi-specialist capabilities that provide true understanding and
powerful insights into the actions, opinions, and motivations of
citizens, consumers, patients, customers, or employees. Visit
https://www.ipsos.com/en-us to learn more.
Category: Research
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Caron Jackson 302.304.3041 Caron.Jackson@SallieMae.com
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