University is more expensive than ever. Here’s how families foot the bill – NBC10 Philadelphia
- Affordability of colleges is increasingly problematic in the wake of the pandemic. Yet families rarely pay the full price.
- Last year, the amount actually paid by families averaged $ 26,373, according to a report by Sallie Mae.
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 adding other expenses, the total tab can be over $ 70,000 per year for undergraduates in some private colleges or even international students attending four-year public schools.
Yet few students and their parents pay the full amount.
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 almost half of university fees, free money from scholarships and grants accounts for a quarter of fees and student loans make up most of the rest, Sallie Mae found.
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 has become an even more important consideration among students and parents.
Today, almost two-thirds of parents are worried about having enough money to cover the cost, according to a separate report from Discover Student Loans.
And yet, fewer families are applying for financial assistance.
The free application for Federal Student Aid, or FAFSA, serves as Gateway to all federal aid money, including loans, co-op and bursaries, 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 that they will not qualify for financial aid, 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.