Families reported spending $28,409 on college for academic year 2023-24 — in line with $28,026 in 2022-23 — and covered nearly half (48%) of expenses with income and savings, according to new data in “How America Pays for College 2024,” the annual study from Sallie Mae and Ipsos, released today.
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About 3 in 4 families (74%) reported completing the Free Application for Federal Student Aid (FAFSA®) for the 2023-2024 academic year, but of those who reported completing the new FAFSA® for the 2024-2025 academic year, just 29% found it easier to complete. In addition, of those who experienced a delay, 44% reported experiencing stress waiting for financial aid decisions, 21% sought out additional financial aid options, 14% considered switching to a lower-cost school, and 10% transferred schools. When it comes to financial aid offers from schools, 71% of families said they support a simplified, standardized letter.
Despite FAFSA® confusion and delays, nearly all families (88%) believe college is an investment in their child’s future, and 79% are willing to stretch financially to get there. Six in 10 families (59%) had a plan to pay for college before the student enrolled, matching an all-time high. Families also reported using artificial intelligence (AI) technology in the college planning process. About one-quarter of students (23%) and 18% of parents used AI in the college application or decision-making process. Three in 10 families (29%) who used AI utilized it to research financial aid or scholarship options.
"The study reveals a significant trend: families are increasingly recognizing the importance of financial planning for college,” said Jennifer Berg, vice president, Ipsos. “Nearly 6 in 10 families now create a comprehensive plan to cover all years of college before enrollment, a notable increase compared to five years ago. This proactive approach not only boosts confidence in their financial decisions but also equips them to navigate economic uncertainties more effectively."
Roughly half of families (49%) reported borrowing for college up from 41% last year. Borrowing covered 23% of costs, up from 19% the prior year with federal student loans and parent loans used most frequently. More than 4 in 10 families who borrowed (43%) said they considered attending more expensive schools because of access to loans. Roughly half of students (48%) expect their federal loans to be forgiven; just 40% of families who borrowed discussed who would be responsible for paying back student loans.
“Borrowing for college makes sense for some families, but it’s critical to have a plan and do so responsibly,” said Rick Castellano, vice president, Sallie Mae. “More clarity around the actual costs of college, greater transparency in federal lending programs, and better efforts to connect students with grants and scholarships would go a long way in helping families make informed decisions about where to go to school, and whether and how much to borrow for higher education.”
Scholarships and grants were used by 80% of families and covered 27% of costs. On average, families reported receiving $8,250 in scholarships from their schools. However, misconceptions about scholarships persist. More than half of families (52%) believe scholarships are only available for students with exceptional grades or abilities, and families who didn't apply cited lack of awareness (50%), doubt in winning (32%), and effort required (21%). To connect more students and families to scholarships, Scholarship Search by Sallie easily finds and sorts through hundreds of available scholarships, with no registration required.
“How America Pays for College 2024” reports the results of Ipsos' online interviews of 1,000 undergraduate students and 1,000 parents of undergraduate students between April 8 and May 14, 2024.
Access the complete report and infographic at www.salliemae.com/howamericapays.
Sallie Mae (Nasdaq: SLM) believes education and life-long learning, in all forms, help people achieve great things. As the leader in private student lending, we provide financing and know-how to support access to college and offer products and resources to help customers make new goals and experiences, beyond college, happen. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.
Ipsos is one of the largest market research and polling companies globally. At Ipsos, our passionately curious research professionals, analysts, and scientists have built unique multi-specialist capabilities that provide true understanding and powerful insights into the actions, opinions, and motivations of citizens, consumers, patients, customers, or employees. Visit https://www.ipsos.com/en-us to learn more.
Category: Research
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