Families Are Paying Nearly Half of College Costs out of Pocket, According to ‘How America Pays for College 2018’

On Average, Families Spent Roughly $26,500 on College in 2017-18;
Three-Quarters of College Funds Come from Sources Other Than Student
Loans

Two-Thirds of Families Are Missing the Opportunity to File FAFSA
In Fall and Get in Line for First-Come, First-Served Financial Aid

NEWARK, Del.–(BUSINESS WIRE)–#HowAmericaPays–Family income and savings covered nearly half (47 percent) of all
college expenses last year, according to “How America Pays for College
2018,” the national study from Sallie Mae — the nation’s saving,
planning, and paying for college company — and Ipsos, an independent
global market research company. The annual research report examines how
families pay for college, how much they spent, and how they made their
funding decisions. The average amount spent on college in 2017-18 was
$26,458.


Three quarters of college funds came from sources other than student
loans. Nearly half of college costs, 47 percent, were paid out of pocket
with parents’ and students’ income and savings. Scholarships and grants
paid 28 percent of college costs, and loans covered 24 percent of
college costs. Extended family and friends paid an additional 2 percent
of college costs.

While no single resource is used by all families to pay for college, the
most prevalent funding sources – scholarships, grants, and parent income
– are each used by about three in five families. Scholarships are the
single most-used resource to pay for an undergraduate’s education
expenses, with 57 percent of families using them last year to pay some
portion of the college bill. About three in five college students
received one or more scholarships, with a total average amount of $7,760.

“The data suggest that scholarships – the vast majority of which are
issued by the colleges themselves – are one of the most valuable means
of helping families pay for college; last year, these funds paid for
almost a fifth of the total cost of college,” said Julia Clark, senior
vice president, Ipsos Public Affairs. “Still, about a third of families
do not even apply for scholarships, showing that there is still
significant opportunity for families to continue to defray the cost of
college.”

More than half of families, 53 percent, borrowed money to help pay for
college last year. Two-thirds of families who borrowed money last year
said they had always planned to borrow to pay for college. When it comes
to planning to repay loans, however, four in ten families, 39 percent,
say they haven’t researched any repayment topics. Nearly two-thirds of
families, 63 percent, expect the student will be solely responsible for
paying his/her student loans. The majority of students, 57 percent, said
they would prefer to make larger payments over a shorter period of time
rather than stretch out payments to make the monthly payment more
affordable.

“It’s gratifying that families are so confident in the financial
decisions they make regarding paying for college,” said Raymond J.
Quinlan, Chairman and CEO, Sallie Mae. “Still, there is more work to do
to equip families with the tools and information that will help them
manage education expenses, whether it be applying for financial aid
earlier in the process or taking steps to minimize student loan
financing costs. We are actively exploring innovative ways to help
families do just that.”

When it comes to completing the Free Application for Federal Student Aid
(FAFSA), three quarters of families report filing the form last year.
That said, the majority of them are not taking advantage of the earlier
availability of the form: 69 percent of families are waiting until
January or later to complete the FAFSA, which is now available on Oct.
1, and are potentially missing out on aid that is awarded first come,
first served.

“How America Pays for College 2018” reports the results of 1,589 online
interviews Ipsos conducted in July 2018 of 799 parents of undergraduate
students and 790 undergraduate students between the ages of 18 and 24.
Data and years shown reflect academic years (July 1 to June 30).

The complete report and a related infographic are available at SallieMae.com/HowAmericaPaysForCollege.
Join the conversation using #HowAmericaPays.

Sallie Mae and Wise
Bread
will co-host a Twitter chat to discuss the report on Thursday,
Oct. 18, at 3 p.m. ET. Follow the chat using #HowAmericaPays and #WBChat.

For more information, or to start your plan to pay for college, visit
SallieMae.com.

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.

Sallie Mae (Nasdaq: SLM) is the nation’s saving, planning, and
paying for college company. Whether college is a long way off or just
around the corner, Sallie Mae offers products that promote responsible
personal finance, including private education loans, free scholarship
search tools, free college financial planning tools, and online retail
banking. 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.

Contacts

Sallie Mae
Rick Castellano, 302-451-2541
rick.castellano@salliemae.com
or
Ipsos
Julia
Clark, 202-560-2014
Julia.clark@ipsos.com

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