How American Families Pay for College

In Paying for College on Jul 05, 2016

We all know college can be costly - that's why applying for the scholarships on Cappex is so important! But since very few students get full-ride scholarships or enough private awards to fully cover the cost of an education, how are their families coming up with the money to pay for college?

How Families Pay for College
It looks like American families are doing a lot to minimize higher education costs. According to the How America Pays for College study from Sallie Mae and Ipsos, 98 percent of families take at least one action intended to make college affordable. That's nearly everyone! Here's what they're doing to reduce college costs:

  • 85 percent of families filled out the FAFSA (Free Application for Federal Student Aid), which determines a student's eligibility for grants and federal loans

  • 77 percent of students worked part-time or full-time while earning a degree

  • 62 percent of students limited their personal spending

  • 49 percent of students lived at home instead of in a dorm

  • 27 percent of students tried to complete their degree more quickly than the typical program length

But even students who take these measures still have costs they need to cover. The How America Pays for College study shows that despite what we hear about the student loan crisis, a big portion of college costs actually don't need to be paid back. Here's a breakdown of how Sallie Mae found the typical American family pays for college:

  • 34 percent of college costs were covered by grants and scholarships

  • 29 percent of college costs were paid for from parental income and savings

  • Student loans paid for 13 percent of college expenses

  • 12 percent of money paid for college came from a student's own income and savings

  • 7 percent of costs were paid for by parental borrowing

  • Family and friends contributed 5 percent of college expenses

This data shows just how important scholarships and grants can be for many students, and they're actually becoming even more critical. Half of all families with students attending college relied on at least one scholarship, and this number jumps to 68 percent at private four-year schools. Scholarships and grants now cover 34 percent of college costs - that's up from 30 percent when the same study was conducted for the 2014-2015 academic year.

The bottom line? Apply for those scholarships - they're readily available and can make a big dent in the cost of an education.

How Does Price Factor Into School Choice?
Is the cost of different colleges a main deciding factor in your college search? You're not alone. Almost 70 percent of families crossed schools off their list when they were researching colleges due to the cost. Financial considerations were the third most common reason a student chose to enroll in a particular school.

While you'll be able to get an idea of a school's sticker price on its Cappex college profile page, keep in mind this isn't the total price many students are expected to pay. Grants and scholarships can cut the cost significantly, leaving students with a much lower net price to pay. If cost still remains a top concern, check your Cappex scholarship matches regularly and apply for every scholarship you can - it can pay off in the long run!

Paying for College

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