CLEVELAND, Ohio – Nearly every parent expects their child to go to college although only 40 percent have planned how to pay for it, according to How America Pays for College 2017, a national study from Sallie Mae, a consumer banking company that specializes in student loans, and Ipsos, an independent market research company.
The average amount families reported paying for public college during the 2016-17 academic year was $23,757, similar to the $23,688 reported in 2015-16, the report says.
Through a combination of income, savings, and borrowing, students covered 30 percent of costs while parents covered 31 percent.
Families who borrowed money for college were more likely to send students to private or out-of-state schools, and more likely to consider the prestige of the university.
The 10th annual report was compiled from phone interviews this spring of 800 parents of undergraduate students and 800 undergraduate students between the ages of 18 and 24.
See the detailed findings below.
See the report below or click here if on a mobile device.
Students and parents have a lifelong expectation that college was in the future.
About 86 percent of students said they knew from the time students were in preschool that they would attend college, while about 10 percent of families said the realization came when students were in high school.
Families in which parents did not attend college were more likely to have decided later: 14 percent say they decided when students were in high school, compared to 5 percent of families in which parents attended college.
About 85 percent said they expected the student would attend college regardless of what he or she would study. About 59 percent of families anticipate their students will eventually go to graduate school.
Choosing a college
Nearly 70 percent of families factored the price of a college when narrowing their list of schools.
About 54 percent of families said more expensive schools always or sometimes offer a superior education.
Paying for college
The share of college costs covered by scholarships and grants was the highest in this report’s history, covering 35 percent of 2016-17 costs. On average, scholarships and grants paid $8,390 of the expense.
Seven in 10 families sought scholarships.
Of those who used scholarships, nearly 90 percent received them from the college, 75 percent from community organizations or private entities and 65 percent from state government.
Loans paid for 27 percent of costs, up from 20 percent the prior year. Parent borrowing increased slightly to $1,819 from $1,608, to cover 8 percent of costs. Student borrowing paid for 19 percent of college costs, roughly $4,551, the highest proportion student borrowing has paid since 2008-09.
Although 529 college savings plans have been available since 1996, only 13 percent of families used them, down from 16 percent the prior year.
Making college more affordable
Almost 75 percent of families chose an in-state school to keep costs down.
Students reduced their personal spending in 68 percent of families, and parents did so in 47 percent.
Students increased their work hours in 50 percent of families; 30 percent of parents worked more hours.
Half of students lived at home.
Nearly 20 percent of students changed majors to pursue a more marketable profession.
The majority of students — 76 percent — worked to help pay their costs: 55 percent were working year-round, 15 percent worked only during school breaks, and 6 percent worked only during the school term.
Differences between borrowers and non-borrowers
Both families who borrowed and those who did not used about the same combined dollar amounts — $17,500 — from non-borrowed sources (parent and student income and savings, scholarships, grants, and contributions from relatives and friends).
In 2016-17, families who borrowed spent an average of $31,082 for college, nearly twice as much as families who did not borrow.
Students from families who borrowed were more likely than students from families who did not borrow to attend private colleges, colleges out of state and live away from home.
Families who borrowed primarily chose their school based on academic program. They were more likely than families who didn’t borrow to consider prestige of the university, and less likely to focus on cost and location.