America pays for college through a combination of resources individual families use in varying degrees. The recent study How America Pays for College 2014 finds that families take approaches that meet their needs, fit their financial life-styles, or match their personality traits.
America pays for college through a combination of resources individual families use in varying degrees. How America Pays for College 2014 finds that families take approaches that meet their needs, fit their financial life-styles, or match their personality traits.
Almost one-fifth of families paid completely with out-of-pocket funds, but the majority sought financial aid. Eighty-one percent of families filed a Federal Application for Free Student Aid (FAFSA). Sixty-six percent of families reported using some grant or scholarship money, which covered an average of 31 percent of college costs.
As out-of-pocket contributions increased, borrowing decreased. Borrowed funds paid 22 percent of costs in 2014, a decline from 27 percent in the prior two years. Both parents and students borrowed less. Thirty-five percent of families borrowed something to pay for college. The student was the sole borrower most of the time, thus student loans covered twice as much of costs as parent loans. Nearly half the families who borrowed always planned to borrow; one-quarter knew borrowing was an option they hoped they wouldn’t have to choose; and another third had not planned on borrowing but made that decision when savings or financial aid came up short.
Three in 5 families believe that paying for college is a shared responsibility between the parent and student. Of those who believe it is the sole responsibility of one party or the other, twice as many believe the responsibility lies with the student than with the parent. However, actual practice showed a different ratio. The parent did not contribute any money last year in 31 percent of families — either out-of-pocket or through borrowed funds — and in another 31 percent of families the student paid nothing out-of-pocket nor borrowed.