How America Pays for College

Here are some interesting stats on how America pays for college from SallieMae as well as my thoughts on them:

• 35% of costs covered by scholarships and grants
• 23% covered by parent income and savings
• 19% covered by student borrowing
• 11% covered by student income and savings
• 8% covered by parent borrowing
• 4% covered by relatives and friends

A few things to comment on here:

• We are probably more like 25% scholarships (no grants due to income) and the rest paid by us (parents).
• As for borrowing, students just need to make sure they are borrowing an appropriate amount for the degree (and hence the job/income) they will get when they graduate.
• Parent borrowing? Nope. Why is this even an option?
• I need to find some friends and relatives willing to kick in some college $$$$$.

$23,757 is the average amount families paid in 2017

This is a bit less than what we'll spend each year, but then again we aren't borrowing and have no need-based scholarships.

45% say cost has no relationship to the quality of education

Interested to hear your thoughts on this, but I think that costs CAN impact quality of education but there are also some great-value schools that have awesome educations.

69% eliminated a college from consideration due to its cost

As they should. If it's not a good investment, then move on to one that is.

86% of families always knew their child would go to college but only 39% of families made a plan to pay for college

This does not surprise me in the least. Americans on average are poor financial planners even when they know that an expense is coming down the road.

That's my take on these -- what do you think?

Comments

[Michael Dinich]

College cost have risen rapidly in the U.S over the last several years, even those with the intitiative to save for college may find it overwhelming. One option a student may want to try is going to a community college for the first two years. Generally, a community college is much less expensive, any many of thes schools are building residence halls for a more traditional like experience.

[Mrs. Picky Pincher]

I was absolutely baffled that my parents didn't save for my college education. I received money each month from the Army as a dependent and I thought they had been socking away the "free money." Nope! That meant we took out loans to pay for school after my scholarships covered a meager amount of the cost. We want to open a 529 for our kids so they can at least have cash saved up for school to avoid debt.