In the wake of the pandemic, many families are taking a close look at the university and wondering if it’s worth the high cost.
Tuition and fees plus room and board for a four-year private college averaged $ 50,770 for the 2020-21 school year; at four-year state public colleges, it was $ 22,180, according to the College Board, which follows college and student aid pricing trends.
When you add other expenses, the total tab can exceed $ 70,000 per year for undergraduates at some private colleges or even for international students attending four-year public schools.
Yet few students and their parents pay the full amount.
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Since last year, the amount actually paid by families was $ 26,373, on average, according to Sallie Mae’s “How America Pays for College” annual report. This figure is relatively unchanged from the previous year.
While parents’ income and savings cover nearly half of college costs, free scholarship and grant money is a quarter of the costs and student loans make up most of the rest, Sallie found. Mae.
Scholarships are a key source of funding, but only just over half of families use them, the education lender said.
About 6 in 10 people who used scholarships obtained them directly from their student’s school and received an average of $ 9,797.
The vast majority of families who did not use scholarships said it was because they had not even applied.
“You don’t have to pay for everything,” said Howard Hook, chartered financial planner and CPA at wealth management firm EKS Associates in Princeton, New Jersey.
“There is nothing wrong with using a combination of resources,” he said, including work, education and even some loans.
During Covid, making ends meet became an even more important consideration among students and parents.
Today, nearly two-thirds of parents fear they will have enough money to cover the costs, according to a separate report from Discover Student Loans.
And yet, fewer families are applying for financial assistance.
The Free Federal Student Aid App, or FAFSA, serves as a gateway to all federal aid funds, including loans, education, and scholarships, which are the most desirable type of aid.
This year, just 68% of families completed the FAFSA, up from 71% in 2019-2020 and 77% the year before, Sallie Mae found.
“It’s worrying to see so few families filing for the FAFSA,” said Ashley Boucher, spokesperson for Sallie Mae. “There is clearly a misconception about who the FAFSA is going to help and how it is going to help.”
Many families mistakenly assume they won’t qualify for financial assistance, Boucher said. In fact, “almost everyone who applies is going to qualify for something.”
Completing the FAFSA may also increase a student’s chances of going to college and graduating, studies show.