07 Jan Families remain committed to college, but make choices to meet costs

Submitted by Maureen Fagen, Sallie Mae

Families who have planned ahead to pay for all years of college (38%), have more options available to them—while those without a plan are more likely to focus on affordability.

That’s one message of How America Pays for College 2014, the national survey conducted by Sallie Mae® and Ipsos. The report also confirmed that parents overwhelmingly believe that college is a worthwhile investment (98%), but at the same time, they are resourceful in containing costs.

Making choices to afford college

This annual study, now in its seventh year, shines a light on some of the choices that families are making to afford college. This year revealed the highest enrollment in two-year public colleges since the survey began (34%, up from 30% last year). In other cost-saving measures, students opted to attend in-state institutions (69%), cut back on entertainment (66%), live closer to home (61%), or live at home (54%). Approximately one-third reported encountering unanticipated expenses, like textbooks and travel costs.

Reaching into their pockets

This year’s study also showed that families reached into their own pockets to cover more than 40% of college costs. Borrowing decreased to cover only 22% of costs, the lowest level in five years.

How families paid for college

Source Percentage* 
Grants & scholarships 31%
Parent income & savings 30%
Student borrowing 15%
Student income & savings 12%
Parent borrowing 7%
Relatives & friends 4%

* Numbers are rounded.

Planners versus non-planners

Families with a plan to pay for all years of college were less likely than non-planners to restrict their choice of college based on cost. They also borrowed less to pay for school. On the other end of the planning spectrum, families who were the least prepared financially were the most likely to have considered not attending college due to cost.

The importance of guidance

These findings highlight the value of well-informed guidance and support that students and their families continue to need from schools. A well-thought-out plan can help families make the right financial decisions from the outset, reducing the probability that their student will need to change direction after enrolling.

The full report of How America Pays for College 2014 and an infographic of the major findings are available at www.SallieMae.com/HowAmericaPays.