Sallie Mae survey: Parents, students and scholarships pitching in to pay college costs

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Students and parents shared college payment responsibilities equally in the academic year 2016-17, each contributing about one-third of the expense, and scholarships and grants covered most of the rest.

That is one of the findings from “How America Pays for College 2017,” the national study from Sallie Mae and Ipsos, an independent global market research company.

The average amount spent on 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 and grants were used by 47 percent.

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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.

Families have become smarter about higher education consumers, with 98 percent taking proactive measures to reduce college costs.

 Nearly three-fourths (73 percent) chose an in-state school, half of the students opted to live at home, and one-fourth enrolled in an accelerated program. In addition, most students (76 percent) were working while in school.

More than half worked year-round, and half 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

“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,  CEO of Sallie Mae.

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.

 “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).

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