with university More expensive More than ever, new financial aid applications are fraught with problems from the start, and families are understandably struggling to figure out how to pay their bills.
As a new school year begins, more students and their parents are turning to familiar resources: Student Loans.
How families pay for college
Without financial aid, the price tag is about four years colleges and universities — after accounting for tuition, fees, room and board, books, transportation and other expenses — is now close to $100,000 One year.
Typically, parents’ income and savings can cover nearly half of college costs, and college can be paid for free. scholarship Financial aid accounts for more than 25% of the cost, and student loans account for most of the rest.
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As of last year, the average amount families actually spent on education expenses was $28,409, according to Sallie Mae’s annual report. How to Pay for College in the U.S. Report.
The education lender found that parents are spending less out of pocket this year and relying more on borrowed funds. Other reports show an increase in the share of parents applying for federal Parent PLUS loans to help pay for their children’s college education.
“We do see that (families) are relying on borrowing to pay for college during these tough economic times,” said Jennifer Berg, vice president of public affairs at market research firm Ipsos.
“This is when the FAFSA really comes into play,” Berg added.
FAFSA was ‘a shocking failure’
To receive any college aid, students must submit a Apply for Federal Student Aid for Free.
FAFSA acts as gateway Research shows that completing the FAFSA also increases a student’s likelihood of attending college and graduating.
However this year, question With the new FAFSA there is discouraged Many students and their families refuse to submit applications. Sallie Mae said only 29% of households who filled out the new form said it was easier to fill out.
“The vast majority of people said the new streamlined FAFSA is completely different,” Sallie Mae spokesman Rick Castellano said.
As of the last count, 10.8 million FAFSA forms The number of applications submitted is down sharply from the roughly 17 million students who normally use the FAFSA.
Sallie Mae said nearly half of the families filing new FAFSAs for the next school year said they experienced delays in receiving financial aid from their schools.
Beth Maglione, interim president and CEO of the National Association of Students, said: “Poor planning by the department has resulted in a stunning failure: Some college students may not receive financial aid funds in time to spend the next few weeks. Classes begin.
Even with loan forgiveness pending, college is worth it
A separate report from Fidelity said factors outside parents’ control continue to loom large when it comes to college, including issues with the Federal Financial Services Administration (FAFSA), rising costs and the future of student loan forgiveness.
since president Joe BidenThe Biden administration later announced that its first broad effort to cancel loans had been blocked. new plan Cancel student debt and provide more targeted guidance who is most likely to qualify For relief.
“Borrowing is up at the same time that half of students expect their loans to be forgiven,” said Sallie Mae’s Castellano. “You have to wonder, is there a connection?”
But Fidelity said that despite the uncertainty of paying for it, the vast majority of parents say college is still worth it.
To this end, more families say saving for higher education is now a top priority.
In fact, 74% of parents have started saving, Fidelity 2024 College Savings Metrics It was found that this proportion had increased from 58% in 2007, when the study was first conducted.
