What's Happening?
A recent survey conducted by Sallie Mae and Ipsos indicates that families are spending approximately 9% more on college education compared to the previous year. The survey, part of the annual 'How America Pays for College' report, involved around 1,000 undergraduate students and an equal number of parents. It explored various aspects of college financing, including the use of federal student loans. On average, families spent $30,837 on college, a figure comparable to pre-pandemic levels. The survey found that families primarily rely on their income and savings, which constitute 48% of college funding, while scholarships and grants account for 27%. Notably, 40% of families did not pursue scholarships due to a lack of awareness or belief in their eligibility. Despite the rising costs, 79% of families eliminated at least one college option based on cost, although 47% reported paying less than the listed price, especially those with students in private institutions.
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Why It's Important?
The survey highlights the ongoing financial challenges faced by families in funding higher education. The increase in spending reflects broader economic pressures and the persistent issue of college affordability. The reliance on personal savings and income underscores the financial burden on families, while the underutilization of scholarships suggests a gap in awareness and access to financial aid resources. This situation could exacerbate educational inequality, as families with fewer resources may struggle to afford higher education, potentially limiting opportunities for students from lower-income backgrounds. The findings also suggest that while families value higher education, cost remains a significant barrier, influencing decisions about which institutions to attend.
