How Students are Paying for College
Sallie Mae and its subsidiaries manage or service $234 billion in education loans and administer $38 billion in 529 college savings plans. Members of its Upromise college savings rewards program have earned $625 million to help pay for college. Each year, Sallie Mae publishes a national study of college students and parents, “How America Pays for College.” The2013 report notes:
In 2013, the typical family paid 70 percent of college costs, or an average of $21,178, through the following sources (p. 6):
- 27 percent through loans
- 27 percent through parent income and personal savings
- 11 percent through student income and personal savings
- 5 percent through money from relatives and friends
Only 30 percent of college costs were covered through grants and scholarships.
To reduce the cost of college (p. 12):
- 67 percent of families eliminated colleges based on cost at any stage during the research and admissions process
- 57 percent of students lived at home or with relatives
- 47 percent of students increased work hours
- 40 percent of families eliminated schools prior to researching the university
- 27 percent of students accelerated their course work to spend fewer semesters earning a degree
- 20 percent of parents increased work hours
- 20 percent of students from low-income families transferred to a lower cost college
Despite billions of dollars in available scholarships and institutional grants, far too many students and families are failing to engage in the necessary research to guide them toward making the right college choice and applying for scholarships for which students would be competitive candidates.
It is equally important for families to have conversations about the cost of college, earning potential of the degree fields students are interested in pursuing, and value of attending colleges with co-op programs that offer students opportunities to gain workplace experiences that make students more competitive candidates for jobs after receiving their college degree. Clearly, the conversations regarding college and careers must begin long before high school.