paying for college

How today’s incoming students and their parents pay for college is changing


Large majority of families are taking steps to lighten the burdens of paying for college.

Students and parents shared paying for college responsibilities equally in academic year 2016-17, each contributing about one-third of the expense, and scholarships and grants covered most of the rest, according to a new report.

How America Pays for College 2017,” a national study from Sallie Mae and Ipsos, reveals that the average amount spent paying for college in 2016-17 was about the same as in 2015-16 ($23,757 vs. $23,688).

Scholarships and grants paid 35 percent of college costs–the largest share in the report’s 10-year history. Scholarships were used by nearly half of all families (49 percent), and grants were used by 47 percent. Parents funded the second-largest share through a combination of income and savings, which covered 23 percent of costs, and borrowing, which paid 8 percent.

Student income and savings covered 11 percent; student borrowing paid 19 percent; and contributions from relatives and friends provided 4 percent. Overall, 42 percent of families borrowed to pay for college in 2016-17.

(Next page: How families are working harder to tackle paying for college)


Families have increasingly become savvier higher education consumers when it comes to paying for college, with 98 percent taking proactive measures to reduce college costs. Nearly three-fourths (73 percent) chose an in-state school, half of students (50 percent) opted to live at home, and one-fourth (26 percent) enrolled in an accelerated program. In addition, most students (76 percent) were working while in school. More than half (55 percent) worked year-round, and half (50 percent) increased their work hours.

While most families (87 percent) were willing to stretch themselves financially to fit college into their budgets, seven in 10 families (69 percent) eliminated a college from consideration at some point in their selection process because of cost. By comparison, in 2008, only 58 percent of families said they eliminated a college due to cost. Families were nearly divided on whether paying more for college equals a better education — 55 percent of families said paying more always or sometimes yields better quality, while 45 percent said cost has no relationship to quality.

Regardless of cost, nearly all families (98 percent) agreed college is an investment in the student’s future, and nearly nine in 10 families (86 percent) said they had expected their child to attend college since he or she was preschool age or younger. Even further, 59 percent said they expected their child to pursue a graduate degree.

“Throughout our 10 years of conducting this study, families have consistently demonstrated they are determined to make college happen, and they’ve also become more value-conscious as they pay for higher education,” said Raymond J. Quinlan, chairman and chief executive officer, Sallie Mae. “The value families place on a higher education degree is so strong that the majority expect their child to achieve a graduate degree.”

While college–and, increasingly, grad school–is the expectation, only four in 10 families said they had a plan to pay for college. In addition, only 13 percent of families said they were using 529 college savings plans, the lowest percentage in the past five years.

“For the past decade, ‘How America Pays for College’ has annually chronicled the ways in which students and parents are addressing the challenge of paying for college, and how it has very much become a family decision,” said Julia Clark, senior vice president, Ipsos Public Affairs. “Their views and how they choose to pay for college reveal valuable insight into factors that have the potential to shape the future of higher education policies and practices.”

“How America Pays for College 2017” reports the results of 1,600 telephone interviews Ipsos conducted in March and April 2017 of 800 parents of undergraduate students and 800 undergraduate students between the ages of 18 and 24. Data and years shown reflect academic years (July 1 to June 30).

Material from a press release was used in this report.

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Laura Ascione

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