Families spent less out-of-pocket for college last year, according to study
Families spent less out of pocket for college in the 2015-2016 academic year as they took advantage of more scholarships and grants to foot the bill, according to “How America Pays for College 2016,” the national study from Sallie Mae and Ipsos—a global independent market research company.
The report, now in its ninth year, found scholarships and grants covered 34 percent of college costs, the largest percentage of any resource over the last five years. Approximately half of families used a scholarship or grant to help pay for college.
Families used parent income and savings (29 percent), student borrowing (13 percent), student income and savings (12 percent), parent borrowing (7 percent), and contributions from relatives and friends (5 percent) to cover the cost of attendance. Compared to academic year 2014-15, families paid seven percent or approximately $1,100 less from out of pocket funds, which includes income, savings, and borrowed funds.
“Families wrote smaller checks for college this year as they looked less to their wallets and more toward free money to make college happen,” said Raymond Quinlan, chairman and chief executive officer, Sallie Mae. “Scholarships and grants have become an increasingly important part of the pay-for-college mix, and it’s encouraging to see organizations, schools, and the government stepping up to provide them. It’s also gratifying to see families’ consistent belief in the value of college while they also take deliberate steps to make it more affordable.”
While families are willing to stretch financially, they are also taking deliberate steps to make college
more affordable. Nearly all families, 98 percent, took at least one cost-saving measure, with most taking five or more. Specifically, 77 percent of students worked during the year, 62 percent cut personal spending, 49 percent lived at home, and 27 percent accelerated coursework to earn their degree faster. In addition, four in five students attended college in their home state, and one in three started at a community college as a first step toward a bachelor’s degree. Eighty-five percent of families completed the Free Application for Federal Student Aid (FAFSA).