For a decade now, Sallie Mae has been releasing an annual report that shows how American families are covering the skyrocketing cost of tuition in the US. The latest report from 2017 reveals six ways that parents are funding (or not funding) college for their children. What you find may surprise you regarding the percentage of funding that comes from these 6 sources.
- Scholarships and Grants (35%) – There are plenty of scholarships and grants available to students, so much so that more than a third of college expenses are covered this way. Helping your kids find scholarships and grants is important for parents.
- Parent Income and Savings (23%) – Parents realize the importance of setting money aside for the future of their children. Of course, this can sometimes come at the cost of other things parents should be saving for like retirement, so that is something to be careful of.
- Student Borrowing (19%) – Of course, some parents just expect kids to pay their own way. Unfortunately, this can leave a student indebted for life, so choose borrowing options carefully if this is a necessity.
- Student Income and Savings (11%) – Some parents start teaching responsibility early. Kids learn to save money they get from summer jobs, from relatives at graduation, and from part-time work during college, and this can cover some college expenses.
- Parent Borrowing (8%) – Occasionally, parents have gone as far as remortgaging their home to put kids through college. Unfortunately, according to the study, only 21% of kids feel responsible for paying their parents back for these loans.
- Relatives and Friends (4%) – Sometimes parents may call on family friends and relatives to help out, although this is usually a generous contribution more than a request.
Your Source for College Planning in Southern California
College Planning Source is a southern California based company that helps families with college admissions and financial planning. Schedule a consultation to get one-on-one support by calling 858.676.0770 or check out our upcoming workshops to get even more assistance.