Surprise! Most Families Are Paying For College Just Fine.
Written by Matthew C. Keegan // 08/25/2009 // Student Loans // 13 Comments
By the sound of it, most Americans cannot afford to keep up with increasingly higher tuition costs, right? Well, not according to the results of a recent Sallie Mae-Gallup poll which revealed that 58% of American families are able to pay for college without borrowing money. True, many students must borrow money to pay for their education but thanks to college scholarship money and grants, most families are managing just fine.
Gallup Conducted Survey
Think you can't afford college? Think again! A recent Sallie Mae survey reveals that most Americans are coping just fine.
Sallie Mae’s How America Pays for College survey, which was conducted by Gallup on behalf of the student lending company, reveals some important finds including: 51% of families receive grants or scholarship funds to help cover college costs. In addition, 25% funded their education via federal loans, 12% through private education loans, while 5% used credit cards to pay for expenses.
The study was conducted this past March/April, as Gallup contacted 1604 college students and parents of undergraduates. 91% of those surveyed indicated that they deeply valued higher education, agreeing with the statement that college leads to a higher quality of life. This positive response comes despite difficulties paying for college during a stiff economic downturn when many people might reevaluate the importance of higher education.
Prioritizing College Funding
“Clearly there is no single way to pay for a college education, however, we are encouraged that the data confirms families follow the ‘1-2-3 approach’ that Sallie Mae has recommended for years: first, savings, scholarship and grants; second, federal student loans; and third, private education loans,” said Albert L. Lord, vice chairman & CEO. “Experience has taught us that when we counsel people to borrow wisely, students benefit from lower defaults.”
SayStudent.com offers a number of tools which can help families get a better grasp on how much college will cost and how to pay for it including the following:
Budgeting Worksheet – To help families to establish a college spending plan.
Cost Comparison – Compare costs between different colleges.
Spending Sheet – Determine where your college money goes.
Student Aid Worksheet – Helps you to keep track of your aid while in school.
In addition, SayStudent.com offers a number of student loan calculators to find the best loan deal available, if needed.
Adv. — Are you considering a career training or continuing education loan? If so, visit your Sallie Mae lender for more information or call them directly at 866-530-9523.
college budgeting worksheet
calculate how much you need
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13 Comments on "Surprise! Most Families Are Paying For College Just Fine."
If you look more deeply into the numbers, you might be skeptical too. This survey seems to directly contradict some recent information that found that federal student loans have risen over 20% in the last year.
Check out my post at Student Lending Analytics Blog for more details:
http://studentlendinganalytics.typepad.com/student_lending_analytics/2009/08/fewer-people-taking-out-student-loans-for-school-i-doubt-it.html
Tim, perhaps the percentages are on the mark, but those families who need assistance are taking out larger loans this year. If so, no survey would pick up that information unless the following question was asked — if you are borrowing money to pay for college this year, will you need less, more or the same amount of money as you’ve borrowed in the past.
I think that this month a lot of families will discover that their funds have fallen short and that they will, indeed, need to borrow.
.-= Matt Keegan´s last blog ..Surprise! Most Families Are Paying For College Just Fine. =-.
I agree with Tim – a small survey carried out does not necessarily confirm that there isn’t a problem. There is good reason for why so many people are frustrated by this predatory lending industry. This survey and its numbers do not have me convinced.
.-= Ms. C. Cryn Johannsen´s last blog ..Notepad Scribbling: Congratulations, Robert Applebaum! =-.
Here’s a story about this crisis. Currently there is $700 billion in student loan debt and many think this problem will be the next financial bubble to burst.
PBS did a story on particular borrower named Gina Moss – it is not just her story but that of thousands and thousands of others like her.
I urge you to watch it, Mr. Keegan.
http://www.pbs.org/now/shows/525/
.-= Ms. C. Cryn Johannsen´s last blog ..Notepad Scribbling: Congratulations, Robert Applebaum! =-.
Here’s my response to your story, Mr. Keegan
http://alleducationmatters.blogspot.com/2009/08/ruminations-on-sallie-maes-recent.html
.-= Ms. C. Cryn Johannsen´s last blog ..Ruminations on Sallie Mae’s recent survey =-.
This article is a lie. Why would the media want to hurt the millions of Americans “drowning” in college debt !!!!! ONLY the most “rich” families could EVER afford college expense “out of pocket”!!!! That is the most ridiculus thing I’ve ever read! I pray that the “average” American will see past these lies!
Well, at least this place allows us to comment on the story.
I know 9 families with kids either in college, or just out of college and 4 more that are sending them off to college for the first time.. and they are NOT paying for college “just fine”.
The parents those kids just going off for the first time have had the benifit of those of us who have gone before, and have helped them avoid some of the entrapments of the student loan industry. Still as one friend said, ” Ive already paid for my house, Now I have to do it again to pay for my sons college, when does it end?”
Of those families that have recently had graduate students, they are now looking at the future. They are looking at paying off parent loans, and their childs ability to find a job so that the child can start paying off their loans. Loan consolidation is a big topic with this group. And worries about the continual economic collapse is always at the top of the list. At a time when these couples (parents) should be looking at finally having the house to themselves, at having some “us” time, they are finding that it might just be another 10 years, cause little Jimmy and Little Jamie are still living at home for the next 6 years so they can concentrate on paying off their loans.
That is not the american dream most of them thought they had.
So I totaly disagree with the title of this article. It definatly does not reflect the true situation, from where I stand and from what I can see.
.-= Mac Wildstar´s last blog ..6 years of college = Highly educated idiot. =-.
Thank you everyone for your comments. One question that I would like to see answered: does Sallie Mae hold a gun to your head when applying for a loan? I apologize for the sardonic question, however I wonder how many of these people haven’t explored all of their options, i.e. attending public college and living at home?
I don’t think borrowers have a gun held to their head.
But generally when borrowers have enormous debt that doesn’t pay off and land in a seriously bad situation, by their own fault and the fault of the lender (as the lender must evaluate the risk) there is a solution. That solution is bankruptcy. Unfortunately the lender doesn’t evaluate the risk, because there is no solution.
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