--When It Comes to Paying for College, Parents Continue to Cover Majority of the Bill and Most Rely on Income and Savings vs. Financial Aid; 71% Say They Completed the FAFSA
Seventy-eight percent of students are planning on returning to their current school, and 68% are comfortable returning to campus this fall, according to "How America Pays for College", the national study from Sallie Mae(R) and Ipsos. Just 7% of students have decided to take time off or enroll at a different school. Sixty-one percent of families believe COVID-19 will not have a long-term impact on their higher education.
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"While families are concerned about COVID-19, their commitment to higher education is unchanged and they don't expect it to have a long-term impact on the student's education." said Jennifer Berg, Director, Ipsos, "However, it has clearly created some challenges for families. Seven in ten students found the instant transition from in-person to online in March difficult and six in ten families are concerned about how COVID-19 will impact the affordability of college next year."
Families spent an average of $30,017 on college in academic year 2019-20. Parents covered 44% of costs, or $13,072, using income and savings. More parents used income this year to help pay (70% in 2019-20 vs. 55% in 2018-19), and significantly more used a dedicated college savings account like a 529 plan (37% in 2019-20 vs. 21% in 2018-19).
Scholarships and grants covered 25% of college costs, or $7,626, and were used by 73% of families. Student and parent borrowing covered 13% and 8% of costs, respectively, totaling $6,581. Half of families (50%) reported borrowing money to help pay for college and roughly half of families with student loans are making payments on them while in school. Of students who used federal student loans, which is the largest source of borrowed money, 35% expect them to be forgiven.
Slightly more than half of families (52%) have a plan to pay for all years of college, up from 44% in 2018-19 and the highest percentage in the history of the study. Eighty percent believe attending college is part of the American Dream, up from 74% in 2018-19, and 91% continue to agree college is an investment in the student's future.
Fewer families filed the Free Application for Federal Student Aid (FAFSA), potentially leaving thousands in financial aid on the table. Just 71% completed the FAFSA in academic year 2019-20, down from 77% in 2018-19 and 83% in 2017-18. The most cited reason for not completing the FAFSA was families didn't believe they would qualify for financial aid (43%). Additionally, 16% didn't file because they missed the deadline, and 15% found the application too complicated.
"Now more than ever, the value of an education is clear. Those with a higher education are experiencing lower job loss and unemployment levels than those without," said Donna Vieira, Chief Marketing Officer, Sallie Mae. "We are committed to helping families access the tools, resources, and transparent information to put higher education within reach. That includes new resources to help families plan for college and complete the FAFSA, which we know is a critical step in paying for college."
"How America Pays for College 2020" reports the results of online interviews Ipsos conducted in April 2020 of 996 parents of undergraduate students and 1,000 undergraduate students between the ages of 18 and 24. Data and years shown reflect academic year July 1, 2019 - June 30, 2020.
The complete report and a related infographic are available at 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 help make college happen and offer products and resources to help customers make new goals and experiences, beyond college, possible. 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 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.
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SOURCE: Sallie Mae
Sallie Mae Ashley Boucher 856.430.0755 email@example.com Ipsos Jennifer Berg 312.526.4224 firstname.lastname@example.org