ERIC ED619332: College Confidence: What America Knows about Paying for College

2022·1.5 MB·English

by  ERIC

2022
College Confidence
What America knows about paying for college
Conducted by Ipsos
College Confidence 2022 Sallie Mae | Ipsos ii
About Sallie Mae
®
We are on a mission to power We believe college should be affordable, equitable,
and accessible for all students, and we’re committed to
confidence as students begin their unique
making that a reality. By offering free resources, we make
journeys—helping them plan and pay for planning and paying for college simpler, helping students
find the right college fit, giving them a quicker way to
college, earn their degrees, and feel ready
complete the FAFSA®, and personalized support in setting
for what’s next. As the leader in private and reaching their financial goals. We also offer a suite of
loan products for undergraduates and graduates to help
education lending, we provide financing
families achieve their goal of higher education.
and expertise to support college access
Students and families want help navigating this important
and completion.
time in their lives. We’re committed to helping them
understand their options, make smart choices, and set
themselves up for success now and in the future.
Start smart. Learn big.SM
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Ipsos is the world’s third-largest insights in today’s connected society. We deliver research with
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best-in-class research techniques that are meaningful
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College Confidence 2022 Sallie Mae | Ipsos iii
About this study
Sallie Mae’s new study—College Confidence: What America
knows about paying for college—explores high school
families’ understanding of college financing. The research
examines what college-bound students and parents know
about financial aid, the FAFSA®, scholarships, and student
loans. The report evaluates perceptions, exposes common
misconceptions, and gauges how prepared high school
families are to pay for college.
To conduct this study, we partnered with Ipsos, a global independent insights
and analytics company. The research results are based on an online survey Ipsos
conducted, in English, with
• 550 parents of high school juniors and seniors who are definitely or
probably planning to continue their education beyond high school, and
• 585 high school juniors or seniors who are definitely or probably planning
to continue their education.
The research was conducted between August 19, 2021, and September 20, 2021.
For details on methodology, including sampling, weighting, and credibility
intervals, see the technical notes section at the end of this report.
College Confidence 2022 Sallie Mae | Ipsos iv
Table of Contents
Key insights 1
College is a path to better opportunities, but there is confusion about
education financing 1
College cost
Families' assumptions about college cost impact school consideration 2
Financial aid
Many families aren’t familiar with the financial aid process 3
First-generation college families require additional guidance 3
The FAFSA®
Most have heard of the FAFSA®, but fewer understand it 4
Scholarships
Nearly half of families think scholarships are only for the gifted 4
Borrowing
Half of college-bound families plan to borrow, but many aren’t aware
of their options 5
Quiz: Identifying college funding sources 6
Families are hungry for college financing education in high school 7
Conclusion 8
Data tables 9
Technical notes 40
College Confidence 2022 Sallie Mae | Ipsos v
Table of Tables
Table 1: Types of colleges under consideration 9
Table 2: Students' primary reason for going to college 10
Table 3: Paying-for-college knowledge 11
Table 4: Statements about paying for college 12
Table 5: Statements about paying for college, % strongly + somewhat agree 13
Table 6: Started to think about how to pay for college 14
Table 7: Feeling confident about paying for college 15
Table 8: Making college more affordable 16
Table 9: Resources to help with transition from high school to college 17
Table 10: Financial topics that should be taught in high school 18
Table 11: Familiarity with FAFSA® 19
Table 12: Previous FAFSA® experience 20
Table 13: Reasons to complete the FAFSA® 21
Table 14: FAFSA® eligibility 22
Table 15: Plans to complete the FAFSA® 23
Table 16: Feeling prepared to complete the FAFSA® 24
Table 17: Reasons for not planning to submit the FAFSA® 24
Table 18: Familiarity with pay-for-college concepts 25
Table 19: Familiarity with pay-for-college concepts, % very + somewhat familiar 25
Table 20: Components of financial aid offers 26
Table 21: Financial aid statement agreement 26
Table 22: Financial aid statement agreement, % strongly + somewhat agree 27
Table 23: Identifying pay-for-college resources 28
Table 24: Correctly identifying 'money that needs to be repaid' 29
Table 25: Correctly identifying 'money that does not need to be repaid' 30
Table 26: Correctly identifying 'types of savings accounts designed for
education savings' 31
Table 27: Researching scholarships 32
Table 28: Scholarship actions 33
College Confidence 2022 Sallie Mae | Ipsos vi
Table 29: Scholarship statement agreement 33
Table 30: Scholarship statement agreement, % strongly + somewhat agree 34
Table 31: Anticipating the need to borrow to pay for college 35
Table 32: Who will borrow money for college 36
Table 33: Borrowing statement agreement 36
Table 34: Borrowing statement agreement, % strongly + somewhat agree 37
Table 35: Federal vs private student loans 38
Table 36: Federal vs private student loan awareness 39
Sallie Mae | Ipsos 1
Key insights
College is a path to
better opportunities,
but there is confusion
about education financing
81% A large majority of college-bound juniors and seniors (81%) view higher
education as a path to better opportunities or a key to a good job, and current
undergraduate families are willing to invest—and even stretch financially—to
afford these opportunities for the student.1 Seventy-four percent of college-
of college-bound students
bound families are already thinking about how they will cover the costs of
believe a college degree
higher education, yet only 42% feel confident about financing that education.
will lead to a good job or
better opportunities in the While paying for college is an experience shared by many families, most who
long run
are in the beginning stages of planning need help navigating the process.
Four in 10 college-bound families (42%) agree that they need help planning to
pay for college, with 43% believing there are too few resources to help pay for
58% education and 40% feeling that the available options are overwhelming.
Moreover, many are confused or lack awareness of different funding sources
that can be used to cover education costs. Nearly 6 in 10 incoming junior and
of families say they are senior families (58%) say they are knowledgeable about different ways to pay for
knowledgeable about college, yet only 11% are very knowledgeable.
different ways to pay
Parents (71%) are more likely than students (46%) to be knowledgeable
for college
about paying for college, but even among that group, only 17% say they are
very knowledgeable compared to 6% of students. Having a parent with a
college degree gives families some advantages in navigating college financing
42%
compared to families where the student will be the first to continue their
education beyond high school (63% and 56% feel knowledgeable, respectively).
Rising high school senior families do not feel more knowledgeable (60%) than
rising junior families (57%); this puts pressure on their last year of high school
don’t know where to go
not only to apply to colleges, but also to become well-informed about how to
for help while planning
to pay for college pay for that education.
1 80% of current undergraduates and parents of undergraduates agree they are willing to
stretch financially to obtain the best opportunities for the student. How America Pays for
College 2021, salliemae.com/about/leading-research/how-america-pays-for-college/
College Confidence 2022 Sallie Mae | Ipsos 2
College financing confusion College cost
Families' assumptions
is impacting multiple
about college cost impact
aspects of paying for school consideration
college, from college cost
Families’ perceptions of college costs are a critical
component in their decisions about which schools to
to the financial aid process,
consider. About 6 in 10 currently enrolled undergraduate
families report eliminating a school from consideration
and from scholarships to
based on cost before deciding which colleges to research
or apply to.2
sources of borrowed funds.
Thirty-four percent of college-bound families are
considering only public colleges and universities, 48%
are considering both public and private schools, 2% are
considering only private schools, and 16% are not sure
what school types they are considering yet.
Many families are not aware that some students do not
pay the full sticker price for college.3 Only 18% of college-
2 How America Pays for College 2021, salliemae.com/about/
leading-research/how-america-pays-for-college bound families agree that the amount families actually pay
3 National Center for Education Statistics—College Navigator is lower than the price advertised by the school.
(https://nces.ed.gov/collegenavigator/)
College Confidence 2022 Sallie Mae | Ipsos 3
Financial aid
Many families aren’t familiar with the financial aid process
College-bound families’ familiarity with the Parents, particularly those with college experience, are
components of financial aid varies significantly: significantly more likely to be familiar with these concepts
than students; however, even among these experienced
17% are very or somewhat familiar
parents, the level of familiarity is not universal.
with Parent PLUS loans
Slightly more than half (54%) of college-bound families are
29% are very or somewhat familiar familiar with financial aid offers or award letters, but 37%
with federal work-study
of those who are familiar don’t know what information is
included in this letter.
56% are very or somewhat familiar
with grants
58% are very or somewhat familiar
with federal student loans
76% are very or somewhat familiar
with scholarships
First-generation college families require additional guidance
Families where neither parent has a college degree First-generation and experienced families are similarly
(first generation) may require more information and likely to plan to borrow to help cover the cost of college
support when it comes to paying for college than families (49% and 44%, respectively). Across all families who plan
where at least one parent earned a college degree to borrow, about half say that both the student and the
(experienced). Two-thirds (67%) of first-generation parent will borrow. First-generation families, however,
families have started thinking about how to pay for are more likely than experienced ones to say that only
college compared to 84% of experienced families, and the parent will borrow (24% vs 13%), while experienced
only 35% of them feel very or somewhat confident about families are more likely to say only the student will
it, compared to 54% of experienced families. borrow (27% vs 18%).
First-generation families are somewhat less First-generation families are more likely to be Hispanic
knowledgeable about different ways to pay for college (29% vs 16% of experienced families) or African American
than their experienced counterparts (56% vs 63% are (14% vs 9% of experienced families), and less likely
very or somewhat knowledgeable). They are significantly to be White (49% vs 64% of experienced families).
less likely to correctly identify different sources of First-generation families are also more likely to have a
college funding and are less familiar with the FAFSA® household income of less than $100,000 (67% vs 22%
than experienced families. Importantly, while 42% of of experienced families).
first-generation families say an increase in Pell Grants and
need-based financial aid would help make college more
affordable, only 32% definitely plan to submit the FAFSA®.
College Confidence 2022 Sallie Mae | Ipsos 4
The FAFSA®
Most have heard of the FAFSA®,
Families and
but fewer understand it
the FAFSA®
The Free Application for Federal Student Aid (FAFSA®) should be a staple of
74%
the paying-for-college conversation. It is the gateway to federal financial aid,
including grants, federal work-study, and federal student loans, and is used by
colleges and universities to assess families’ need-based scholarships.
Fewer than half of college-bound families (44%) are very or somewhat familiar have heard of it
with the FAFSA®, although most (74%) have heard of it. More parents are familiar
with the FAFSA® than students, largely due to their own experience with the
application. Senior families (47%) are just slightly more familiar with the FAFSA® 62%
than junior families (40%).
While 62% of college-bound families say they are definitely or probably going to
submit the FAFSA®, a significant portion simply don’t know what it is for or who
plan to submit it
should complete it: 34% don’t know any reasons why someone would complete
the FAFSA®, and 44% don’t know that it is for all students. Moreover, 29% of
families agree that filling out the FAFSA® is a waste of time if parents are making
20%
too much money.
Even among families who are planning to submit the FAFSA®, only 20% say they
feel very prepared to complete the application. Senior families feel no more
feel very prepared to
prepared to fill it out than junior families.
complete it
Scholarships
Nearly half of families think
scholarships are only for the gifted
Scholarships are the most understood piece of the paying-for-college puzzle.
Three-quarters of college-bound families (76%) are very or somewhat familiar
with scholarships, and 79% correctly identified scholarships as money that does
not need to be paid back. More than 8 in 10 families (83%) have already started,
or are planning, to research scholarships to help them pay for college.
Even though most families plan to explore scholarships to help make education
more affordable, almost half (45%) believe that scholarships are only available
for students with exceptional grades or abilities. This misconception aligns with
a finding from How America Pays for College 20214, where 44% of undergraduate
families reported not using scholarships to help pay for AY 2020–21, and
three-quarters of non-users never applied for a scholarship, missing out on
opportunities to lower their college cost.
4 How America Pays for College 2021,
salliemae.com/about/leading-research/how-america-pays-for-college/