Families Spent $26,373 on College in 2020-21; Family Income and Savings Cover Majority of the Bill
Families with a Plan to Pay for College at an All-Time High, Yet FAFSA® Completion Rates Reach the Lowest Point in the 14-Year History of the Report
While the pandemic created challenges for students and families, nine in ten families continue to believe college is an important investment in their future. Eighty nine percent believe a degree will create new opportunities, and 81% believe it will yield higher earnings, according to “How America Pays for College 2021,” the national study from Sallie Mae® and Ipsos. In addition, the majority of families are eager for students to get back to campus. In fact, just 17% report they prefer online learning versus on campus or a hybrid model.
“Despite the turmoil caused by the COVID-19 pandemic in 2020, Americans still believe in the value of college and say the investment in higher education is worthwhile,” said Jennifer Berg, Research Director, Ipsos. “Many believe that a college degree creates opportunities that the student would not have access to without it, but 2020 has also highlighted the need for personal growth, with a growing number of families saying they value the intellectual and social experience of college regardless of the potential increase in income.”
Families spent $26,373 on college in AY 2020-21, a 12% decrease from the year prior. Students and parents continued to use a combination of resources to cover college costs with strategies similar to pre-pandemic:
- Family income and savings, used by 91% of families, covered 53% of college costs.
- Scholarships and grants, used by 72% of families, covered 25% of college costs.
- Borrowed funds, including student loans, used by 47% of families, covered 20% of college costs.
This year, more families (58%) had a plan to pay for college than ever before. That said, the percentage of families who completed the Free Application for Federal Student Aid (FAFSA®), 68%, represents the lowest level of completion in the study’s 14-year history. Of those who didn’t file, 44% said they didn’t think they’d qualify for aid, while 34% said they missed the deadline, found the application too complicated, or didn’t have the time. In addition, of those who didn’t use scholarships, 74% didn’t apply. When asked about what stopped them, 44% of students said they didn’t think they’d win, and 28% didn’t have time to apply.
“College is a great equalizer, but we must ensure more have the means to access and complete it,” said Nicolas Jafarieh, senior vice president, Sallie Mae. “More families are planning how to pay for college, but too often there are missed opportunities to make college more affordable, including applying for scholarships and filing the FAFSA®. With more discussion and available resources around these critical paying-for-college moments, students can tackle their future with confidence.”
“How America Pays for College 2021” reports the results of online interviews Ipsos conducted in English, between April 8 – May 4, 2021, with 985 parents of undergraduate students and 1,000 undergraduate students between the ages of 18 and 24. Data and years shown reflect academic year July 1, 2020 – June 30, 2021.
The complete report and a related infographic are available at SallieMae.com/HowAmericaPays.