5 Takeaways from “How America Pays for College”
Each year, Sallie Mae teams up with the market research company Ipsos to ask families about their attitudes toward the value of a college education and what they are doing to make college more affordable. Now in its 10th year, “How America Pays for College” reflects the current reality for American families pursuing higher education. Here are some notable findings from the 2017 study:
- While 98 percent of the current generation of college students and parents agree that college is an investment in the future, families continue to put off saving. Close to 9 in 10 families said they knew as soon as the student enrolled in preschool that their child would one day attend college. Still, fewer than 4 in 10 had created a plan to pay for all years of college before their child enrolled.
- Over time, families seem to have grown more sensitive to cost. In 2008, 58 percent of families eliminated colleges due to cost at some point during the college selection process. This year, 69 percent reported doing so. In addition, fewer families believe a college’s cost is an indicator of the quality of education offered there.
- Almost all families — 98 percent — are taking deliberate steps to make college more affordable, and the number one way they save on college costs is to choose an in-state school. In addition:
— Students increased their work hours in 50 percent of families, and parents worked more hours in 30 percent.
— Half of students (50%) were living at home.
— One in four students (26%) enrolled in an accelerated program.
— One in five students (18%) changed majors to pursue a more marketable profession.
- In years that parents contribute less, the funding gap appears to be bridged by borrowing, with students doing more borrowing than parents. In 2016-17, students in 36 percent of families borrowed student loans, used credit cards, or borrowed some other type of loan to pay for college.
- More students borrowed this year and they borrowed higher amounts than the previous year. Students borrowed in 36 percent of families, compared to the previous year’s 29 percent. The dominant source of borrowed money was federal student loans.
“In 2016-17, students in 36 percent of families borrowed student loans, used credit cards, or borrowed some other type of loan to pay for college.” — How America Pays for College 2017
The Sallie Mae study is a powerful reminder that college is a major expense – but one that can be best managed by saving early for their college.
To read the study, go to https://www.salliemae.com/research/how-america-pays-for-college/. To calculate how much you would need to save each month to cover your child’s college, based on their age, go to http://www.myfloridaprepaid.com/what-we-offer/.