Families Continue to Value Higher Ed, but Miss Out on FAFSA, Scholarships
Students and families across the country continue to believe in the value of higher education, according to Sallie Mae® and Ipsos’ “How America Pays for College 2021” research report. Nine in ten believe college is an investment in the future, 89% believe a degree will create opportunities, and 81% believe graduates will earn more as a result of their degree.
Given the consensus surrounding the value of higher ed, it makes sense that families are prioritizing their plans for how to pay. More than half of families (58%) report having a plan to pay for all years of college, up from 44% just two years ago. Understanding how families are planning and paying for college helps Sallie Mae uncover more ways to bridge gaps in higher education financing, as well as point students and families to existing resources that could help them.
Here are three things we know about how students and families value, plan, and pay for college today — and how Sallie Mae is helping students make sense of it all.
While more families have a plan to pay, fewer are completing the FAFSA®
The number of families filling out the FAFSA® continues to decline, which means more families are missing out on important federal financial aid opportunities. Just 68% of families filled out the FAFSA in the 2020-2021 academic year, the lowest level in the 14-year history of “How America Pays for College.”
Some of the most-cited reasons for not completing the FAFSA® include concerns about it feeling too complicated and the time required to complete it.
More than half of families using scholarships – but majority of those who don’t have never applied
Scholarships are an effective way to lower the total cost of college — they covered 16% of all education costs last year — but many families are not taking advantage of these opportunities for free money. According to the report, 44% of families didn’t use scholarships to help pay for college. Of those who didn’t use scholarships, 74% didn’t apply. Many families say they don’t know what scholarships are available, and students said they didn’t have time to apply and didn’t think they’d be eligible to win.
There is no shortage of scholarship opportunities out there, but finding the right ones can be tricky. Sallie Mae’s free scholarship search tool pools more than six million scholarships, worth up to $30 billion in funds. Students fill out a brief profile and are then matched to relevant scholarships based on various factors including field of study, location, hobbies and interests.
Last year, 24,000 students won a scholarship using Sallie Mae’s search tool, covering more than $67 million in college costs.
More families (56%) are making payments on student loans while in school.
The number of families making payments on loans while the student is in school is on the rise, up from 46% last year and 41% the year before. Making loan payments during school helps families save money long-term and lower the total cost of the loan.
To that end, Sallie Mae offers the choice between three in-school repayment plans — deferred payments, fixed monthly payments, and interest-only payments. While everyone’s financial situation is different, these options allow students and their families to make informed decisions about the best path for them.
Preparation is the key to both financial planning and academic success, which is why Sallie Mae is committed to providing students and families with the information and tools needed to be successful on both fronts.
FAFSA is a registered service mark of U.S. Department of Education, Federal Student Aid
Report: Vast Majority of Students and Families Effectively Managing Private Student Loans
The latest Private Student Loan Report from MeasureOne provides a helpful glimpse into the private student loan industry — and some of the findings may surprise you.
Contrary to student debt-related headlines, students and families continue to effectively manage private student loan payments today. In fact, the overwhelming majority are back to making regular payments despite the pandemic, and fewer than 1% of loans are defaulting annually.
Private student lenders have an approach anchored on strong underwriting, assessing a borrowers’ ability to afford a loan. High rates of cosigner participation also help keep delinquency and default rates low. This year was no different, with these rates at their lowest since 2015 — accounting for less than 1% of all private student loans across the industry.
Private student loans make up approximately 8% of outstanding student loans. The remaining 92% — roughly $1.59 trillion — are federal loans that are owned or guaranteed by the Department of Education. Recent stories have shed more light on some of the issues around federal student loan repayment.
Sallie Mae is committed to helping students achieve their higher education goals — and the last year-and-a-half was no exception. By empowering students with the knowledge, tools, and resources to make smart financial decisions, Sallie Mae can set them up for a lifetime of success and confidence.
Click here to view the full MeasureOne Private Student Loan Report.
How Sallie Mae Is Helping Make College More Affordable and Accessible for All
The benefit and value of a higher education has never been greater, but the reality is not all students have the same opportunities. About 78% of high school students from the highest economic class enrolled in college, compared to 28% of their low-income peers. And minority students finish their degree programs at significantly lower rates than white students.
Sallie Mae® believes all students who desire to achieve a higher education deserve the support they need to make it happen. Higher education is a great equalizer, but only when students from all backgrounds have the opportunity to access and complete it.
Advancing diversity in higher education
Sallie Mae launched a variety of initiatives to help drive equity in higher education, including a partnership with Thurgood Marshall College Fund to provide minority students scholarships to not only access and begin their education journey, but also complete it. Over the course of the next three years, $3 million in scholarships will be awarded to students through The Sallie Mae Fund’s Bridging the Dream Scholarship Program:
Specifically in 2021:
- The Bridging the Dream Scholarship for High School Seniors will provide $250,000 in scholarships to help make the dream of higher education a reality for minority students who are finishing high school.
- The Completing the Dream Scholarship will award $650,000 in scholarships to minority students and those from underserved communities who are on track to graduate but are at-risk of not completing due to financial emergencies or unpaid school bills.
- The Bridging the Dream Scholarship for Graduate Students will provide $100,000 in scholarships to students from minority and disadvantaged communities who are looking to use their degrees to advance social justice.
Addressing unmet needs
In addition to scholarships, Sallie Mae is distributing $1.5 million — $500,000 a year — to nonprofit partners who remove obstacles to higher education for minorities and underserved communities.
In 2020, Sallie Mae supported:
- The Point Foundation, which helps LGBTQ students access and complete college, and offers services that counter bullying, promote confidence, and build experience through internship programs.
- Colin Kaepernick Camp, which promotes leadership and empowerment for social change in Black and brown communities.
- National Urban League, which is working to understand how the digital divide is a barrier to Black and brown students’ ability to access and complete college.
- Hispanic Association of Colleges and Universities, which supports campuses with high Hispanic enrollment.
Providing tools to students and families
Sallie Mae aims to help students and families access, afford, and complete college, and we provide a series of free online tools to make that possible.
Sallie Mae’s scholarship search features 6 million unique scholarships worth up to $30 billion. Last year, 24,000 students received a scholarship using the search tool, covering more than $67 million in college costs.
Our college planning calculator can also help students and families get ahead on saving and paying for college.
In the coming weeks, Sallie Mae will launch a new series of free products to help students research colleges, understand graduation rates and average salaries for their desired career path, and compare average financial aid packages.
Much more work is needed to close achievement gaps and increase access to, and completion of, higher education. College should be affordable and accessible for all students, and Sallie Mae is dedicated to finding and implementing solutions.
FAFSA is a registered service mark of U.S. Department of Education, Federal Student Aid