Each year, millions of students and families begin planning for college by completing the Free Application for Federal Student Aid (FAFSA®). It’s the gateway to accessing more than $100 billion in grants, scholarships, and other federal financial aid for higher education. Confusion and misconceptions about the FAFSA, however, persist — leading those who need the most support to potentially miss out on critical aid to make college more accessible and affordable. As an education solutions company and responsible private lender, Sallie Mae helps students and families complete the FAFSA, offering a free step-by-step guide as well as free resources to connect them to scholarships.  

Test your knowledge of the FAFSA by taking this quiz.

Paying for college can be a complex, stressful process. Yet, a new study finds students and families may be missing out on scholarships, which can help make college more accessible and affordable. In fact, about one-third of families didn’t take advantage of scholarships to help cover college costs for the 2023-2024 academic year, according to Sallie Mae’s 2024 How America Pays for College report.

In addition, misconceptions about scholarship availability and eligibility persist. More than half of families (52%) believe scholarships are only available for students with exceptional grades or abilities, and families who didn’t apply cited lack of awareness, doubt in winning, and effort required to apply.  

The good news is there are free resources that can help connect students and families to scholarships. Scholarship Search by Sallie easily finds and sorts through hundreds of available scholarships with no registration required.

Don’t Leave Free Money on the Table

Applying for free money is the first step in Sallie Mae’s 1-2-3 approach to paying for college.

Free money, such as scholarships and grants, are often what helps students from underserved communities access and complete higher education. Last academic school year, 88% of students attending Historically Black Colleges and Universities (HBCUs) relied on scholarships and grants to pay for college.

To help expand access and completion for more students, Sallie Mae’s Bridging the Dream Scholarship Program helps those from underserved communities access and complete college. Since 2021, Sallie Mae has awarded over 900 scholarships worth nearly $4 million in partnership with Thurgood Marshall College Fund (TMCF) through the Bridging the Dream Scholarship programs, which also include the Completing the Dream Scholarship and the Bridging the Dream Scholarship For Graduate Students. These scholarships are part of the company’s continued mission to help students access and complete higher education. 

Connecting students with scholarships and grants before they borrow is critical. However, more clarity around college costs and greater transparency in federal lending programs would go a long way in helping families make informed decisions about higher education financing.

As a responsible private lender, Sallie Mae advises students and families to explore free money like scholarships and grants before borrowing. The gateway to this aid is the Free Application for Federal Student Aid (FAFSA®), which gives students and families access to $114 billion in scholarships, grants, state-based and federal financial aid. Too many families, however, miss out on this critical aid because of persistent misconceptions about their eligibility or confusion around how to complete the application, resulting in billions of dollars left unclaimed each year.

This year saw significant glitches and delays resulting from the rollout of a new FAFSA with fewer questions. While the intent was to streamline and simplify the process and expand eligibility for need-based aid like Pell grants, persistent implementation issues left students and families frustrated and financial aid offers from schools delayed.

About 74% of families reported completing the FAFSA for the 2023-2024 academic year, according to Sallie Mae’s How America Pays for College 2024 report. Of the families who filled it out for the 2024-2025 academic year, only 29% found it easier to complete. In addition, of those who experienced a delay, 44% reported experiencing stress waiting for financial aid decisions and 21% sought out additional financial aid options. When it comes to financial aid offers from schools, 71% of families said they support a simplified, standardized letter. Despite the FAFSA confusion, 88% of families still believe college is an investment in their child’s future, and 79% are willing to stretch financially to get there.

While these delays point to broader issues with the federal financing system for higher education, it’s still critical for families to complete the FAFSA. The FAFSA® is an important first step for students and families to help make college more accessible and affordable. Sallie Mae supports simplification of the FAFSA® and is improving awareness to help more students and families connect to scholarships, grants, and other critical aid.

As an education solutions provider, Sallie Mae provides free tools including a step-by-step FAFSA guide, information,  and webinars to help students and families navigate the new FAFSA and complete it. We also offer free resources like Scholarship Search by Sallie to help students and families find and apply for scholarships.

Here are five important points that students and families should know about the FAFSA®:

1. All students—regardless of family income—should complete the form.

Most families—87%—know to submit the FAFSA® each year so that their student qualifies for financial aid, but not all families know that every student is eligible to apply. Some 33% of families believe their income is too high for their student to qualify for aid, the most frequently mentioned reason why families didn’t submit the FAFSA® last year.

The reality is all students, regardless of income, should complete the form. Some of that aid, like scholarships, grants and state-based aid, is offered on a first-come, first-served basis. That’s why the sooner families can complete the FAFSA®, the better. Rollout for the FAFSA will start October 1^st and the form will be fully available on December 1^st for the 2025-2026 school year.

2. The FAFSA® is free.

Families should never pay to submit the FAFSA®. Filing is free, period. A paid service will not get students more aid. Sallie Mae offers students a step-by-step guide for navigating the new FAFSA, but they can also check with their high school, local college, and financial aid office for assistance.

3. Fill out the “special circumstances” form when financial information changes.

Students and families—including those attending graduate school—should complete the FAFSA® every year they are in school. That said, sometimes income and other factors may change due to circumstances such as a job loss or medical emergency. That’s when completing a “special circumstances” form may make sense. The form is available from college financial aid offices and can help students receive additional aid in certain situations.

4. List schools on the FAFSA® even if it’s not a final list.

If students don’t list all colleges they’re considering on their FAFSA®, then the schools won’t know the student is interested in applying for grant money from them. Students should also always list state schools first in case they offer additional state-based aid on a priority basis.

5. There is no age limit.

Federal financial aid is just as available to non-traditional students in the 24- to 35-year-old range as it is to students in their late teens and early twenties. There’s no age limit for receiving federal financial aid—so all students and families should apply.

FAFSA is a registered service mark of U.S. Department of Education, Federal Student Aid

After years of studying and working hard, millions of college graduates across the nation are transitioning from college to the next chapter of their lives. This could mean new jobs, new cities, or new goals — a cause for celebration. 

Even after students finish college, the learning doesn’t stop. Next on the syllabus is setting and maintaining a healthy budget, and for those who borrowed to pay for college (41% of students, according to our “How America Pays for College 2023” report), that budget will soon include paying back student loans.

To ensure students get started on the right track, Sallie Mae® works to remove the element of surprise from loan payments by initiating clear communication with students and cosigners while they’re in school and throughout the life of their loans. As a responsible private lender, we believe that transparency and clarity about how much students and families owe and when they need to pay back their loans is critical to helping them responsibly plan for higher education. 

Staying up to date on student loan status

Students have very busy schedules, which is why we make it as easy as possible for them to stay up to date on the status of their loans. Students can create an online account or download the Sallie mobile app to get notifications of when their upcoming payments are due. They can even enroll in auto-debit to ensure their payments are always on time, which can also save them money by lowering their interest rate.

We also send students and their cosigners a loan summary each year they are in school, including interest accrued. This is especially important for customers who choose to defer payments on their loan during college, as it helps them keep track of what they’ve borrowed and what they owe. That said, roughly half of our customers choose to make a fixed payment or pay interest on their loans while in school, which can significantly lower the total cost of the loan.

Tools and tips for the six-month separation period

Sallie Mae private student loans come with a six-month separation or grace period for undergraduate programs that begins once a student leaves school, giving them time to find a job and get settled into post-college life. We let students know at the start of their grace period what their estimated payment amount will be and provide tips on when, where, and how to pay on time.

We also offer free tools to help students prepare for repayment, such as a monthly budget worksheet, which helps students create a budget to meet their financial goals and our student loan repayment calculator that gives students an estimate for their upcoming monthly payments.

At the end of the day, preparation is key to responsible financial planning. From the moment students take out a loan through the months post-graduation, we help students and families not only meet their loan payments, but make strides toward their financial goals.

The federal higher education financing system is complicated and can often leave families feeling confused about all the potential paths for their education journey and where to start. To better understand how students and parents approach planning and paying for college, Sallie Mae annually conducts its “How America Pays for College” report with Ipsos.

The research explores education funding sources—from family income and savings to scholarships, grants, and borrowed funds—and evaluates trends in payments over time.

Here are five things to know about how America pays for college:

1. Slightly more than half of families have a plan for how to pay for college. 

Last year, 53% of students and families reported making a plan for how to pay for college before the student enrolled, slightly down from last year’s high of 59%.

Students attending four-year public and private schools are more likely to plan ahead than students attending 2-year schools. The same goes for families with prior college experience. Fifty-five percent of families with college experience have a financial plan, compared to 45% of first-generation college families.

An even larger gap exists between higher- and lower-income families. Seventy-nine percent of families who make more than $150,000 per year had a plan, compared to just 43% of families who make less than $50,000.

Sallie Mae helps power confidence through free tools like Scholarship Search by Sallie, where students can easily access a wide variety of scholarships.

2. Majority of families are still unaware of when the FAFSA® becomes available.

While FAFSA completion rates are holding steady at 71%, just more than seven in 10 families are still unaware of when the application opens, and 30% of families bypass the form altogether.

Among the families who didn’t submit the FAFSA, majority believed they made too much money to qualify. Twenty-five percent of families found the application to be too complicated, while nearly 30% reported not having the required information for the application.

The FAFSA is the gateway to accessing more than $112 billion in grants, scholarships, and federal financial aid for college, and those most likely to qualify for aid are not completing the form due to lack of awareness. States and colleges rely on information from the FAFSA to determine need-based aid for qualifying students.

3. Scholarships are key for accessing higher education, especially for students attending HBCUs.

Scholarships play a meaningful role in families’ college journeys—not only as a source of funding —but also a source of pride. More than half — 61% — of families relied on scholarships to help lower the cost of college last year. Most scholarships were given from the school the student was attending, followed by the state and non-profits or organizations.

For families who didn’t take advantage of applying for scholarships, most said it was due to lack of awareness, low confidence in winning, or common misconceptions about who is eligible to apply. Forty-five percent of students and parents believe scholarships are only for exceptionally gifted students. In fact, there are scholarships available for all types of students — from being a first-generation college student to being left-handed.

Sallie Mae helps connect students to scholarships through Scholarship Search by Sallie.

4. Many families eliminate schools based on cost.

Choosing a college is a momentous decision that is largely impacted by the cost of attendance. Seventy-eight percent of families eliminated a school based on cost at some point during their college search and decision process last year. Around one third of families — 32% — said the current state of the economy impacted their decision as well.

Yet, 75% of families said they were willing to stretch themselves financially because they view higher education as an investment in the student’s future.

Sallie Mae helps students and families finance their higher education responsibly by encouraging and educating students on utilizing scholarships, grants, and other federal aid before borrowing.   

5. Many lower-income and first-generation families rely on grants.

While 57% of all families used grants to pay for college last year, first generation families and families earning less than $50,000 per year — 68% and 74% respectively — reported higher grant usage.

Sallie Mae supports meaningfully expanding grants, such as the Pell Grant — which has helped more than 80 million low-to middle-income students access and complete higher education. Last year, around $3.6 billion in Pell Grants went unclaimed, aid that could have helped more students achieve their college dreams. Meaningful reforms, such as the FAFSA Simplification Act and increasing the maximum Pell Grant amount, could help more students access this critical aid.

FAFSA is a registered service mark of U.S. Department of Education, Federal Student Aid

College should be more affordable and accessible for students from all backgrounds, and we’re committed to making that happen by helping families confidently navigate to, through and immediately after college. We power confidence in students and families by providing tools and resources to make informed decisions about higher education.

Test your own college preparedness knowledge by taking the quiz below.

Figuring out how to pay for higher education can be stressful and complicated. Follow our three-step approach to simplify the process:

1. Start with money you don’t have to pay back.

Consider any savings or income you can put toward your tuition.

• Savings: In addition to tapping current income, consider a tax-advantaged account like a 529 plan or goal-based savings account that can be used to cover education costs.
• Scholarships: Millions of scholarships are available for incoming and current college students. Sallie Mae’s free Scholarship Search Tool can help you find the scholarships best suited for you.
• Grants: Colleges, states, and the federal government provide funds to students based on need. Complete the Free Application for Federal Student Aid (FAFSA) early to maximize your chances of receiving grants.
• Work-study: These part-time jobs allow students to earn income while in school. Make sure to submit your FAFSA to be considered for work-study programs.

2. Explore federal loans.

Federal loans are made by the government, available to everyone without assessment of ability to pay them back, are taxpayer funded, and most need to be paid back with interest. Students can apply by completing the FAFSA.

3. Consider a responsible private loan.

Private student loans can bridge the gap between income and savings, scholarships, grants, federal aid, and any remaining higher education costs.

Private student loans are credit-based and underwritten, meaning the lender assesses the student’s ability to afford a loan before approving it.

Because most students do not have significant credit profile, majority of private student loans require a cosigner to qualify.  

Like the majority of federal student loans, private student loans need to be repaid with interest.

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Borrow responsibly

Sallie Mae encourages students and families to start with savings, grants, scholarships, and federal student loans to pay for college.

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For more information, visit SallieMae.com/CollegePlanning

It’s time to talk. Americans owe $1.7 trillion in student loans – and roughly 93% of that debt is made and held by the federal government.

Higher education lays the foundation for future success, and loans can help make those successes and dreams a reality. But responsible repayment begins with responsible lending – that’s where Sallie Mae® comes in. We clarify the complex world of college financing and help students achieve their education goals. How? Let’s start at the beginning…

How much do students typically rely on loans to pay for college? 

College financing looks different for everyone and not everyone borrows to pay for college. In fact, roughly 45% of bachelor’s degree recipients from public and private non-profit four-year colleges graduated with no student debt, according to College Board.

According to Sallie Mae’s How America Pays For College report, in the 2021-22 school year, families reported spending an average of $25,313 on college, with borrowed money like loans covering 18% of that. Family income and savings covered over half of these total costs and scholarships covered another quarter.

We believe that responsible borrowing begins with responsible lending, and that we’re only successful when our students are. This approach has proven enormously successful for our borrowers.

How do students pay for college?

Students and families pay for college through a combination of income and savings, scholarships, grants, and loans. After maximizing money that doesn’t need to be paid back, such as scholarships and grants, the next step in the college financing process is to fill out the Free Application for Federal Student Aid (FAFSA®). The FAFSA opens the door to federal, state, and school-based financial aid, including scholarships, grants, work-study, and federal student loans. After completing the FAFSA and evaluating financial aid offers from schools, if families need more to cover remaining costs, they can apply for credit-based private student loans to fill the gap. Private lenders like Sallie Mae will look at creditworthiness and repayment history before approving loan applications.

How does Sallie Mae help?

Sallie Mae is best known as a private student loan lender, but as an education solution provider, we make it easier to understand, plan for, and finance higher education. We believe higher education should be affordable and accessible.

We offer several free resources like planning calculators and a scholarship search tool that help students build their plan – and pay for college – with confidence. If families need more to cover remaining costs, we offer credit-based private student loans. Lending responsibly also means assessing the ability to repay before a loan is approved. In fact, on average approximately 2% of our loans in repayment default annually.

Is Sallie Mae part of the federal government?

No. Sallie Mae is a private student lender – we offer private, credit-based loans.

Our name has been around for decades, but the company we are today is fairly new. Sallie Mae stopped originating federal student loans in 2010. Today, we exclusively offer private student loans. Even before we offer a private student loan, we help student and families build an effective and responsible plan to pay for college with a three-step approach. We advise them to start with free money and then explore federal student aid before considering a private loan.

What’s the difference between federal and private student loans?

The federal government is the largest provider of student loans, holding roughly 93% of all student loan debt. Federal student loans are made to all eligible students who apply for them; they are issued directly to students, without underwriting.  

Private student loans, on the other hand, are originated by credit unions, state agencies, and banks like Sallie Mae. Private student loans make up about 8% of all student loans. They are recommended as supplemental support to students and families who have financed the bulk of their education with income and savings, scholarships and grants, and federal aid. Private student loans are made to students, often with a cosigner, and require an evaluation of creditworthiness before they’re issued.

What is a federal Parent PLUS loan, and how is it different from other federal student loans?

Federal Parent PLUS loans are made to students’ parents rather than to students themselves. Unlike federal student loans, federal PLUS loans are unlimited up to a school’s full cost of attendance, minus any financial aid the borrower’s child has already received. These loans do require a basic credit check.

Federal Parent PLUS loans come with higher origination fees and higher interest rates than other federal student loans. Additionally, repayment for these loans can begin right away. These factors, in conjunction with the unlimited nature of PLUS loans, mean that they can be difficult to pay back.

When and how do students start paying back loans?

Federal student loans are either direct subsidized loans, direct unsubsidized loans, or direct PLUS loans. Federal student loans are available to any eligible student who completes the FAFSA; they are not underwritten and do not assess the ability to repay. Depending on the loan, students can make payments while in school or defer payment until after college although interest will accrue during this time. Many federal student loans offer income-based repayment plans, which allow qualifying borrowers to make monthly payments based on a percentage of the borrower’s salary after college.

If families need more to cover remaining costs, private lenders like Sallie Mae offer credit-based student loans to fill the gap. When students are approved for a private loan, they can choose either a fixed or variable interest rate and from a variety of in-school repayment options that determine how much principal – the original loan amount – and how much interest is paid back each month. Sallie Mae pioneered the option of making small or interest-only in-school payments to reduce total debt and keep overall balances down. More than half of our customers choose to do this. In fact, choosing an in-school payment option may also lead to a more effective interest rate. Students can also choose to defer until six months after leaving school.

It’s critical that students understand their loan and repayment options before making the commitment. That’s why Sallie Mae provides resources and tools for students and families to help them navigate the college financing process. We conduct routine communication with students about their loans while they are in school, long before their first payment is due and provide annual student loan snapshots to help them understand how much they owe and what strategies they can implement to help them pay down faster.

Higher education opens the door to more opportunities. But not all students – especially those from underserved communities – have the same resources or support to achieve their college dreams. Read from Sallie Mae EVP Nic Jafarieh about how Sallie Mae provides tools and resources to level the playing field for all students and families to access and complete higher education.

Students with federal student loans will start making payments again in January.

When Covid-19 turned America upside down, the federal government put a pause on federal student loan repayment. The program suspended current loan payments and collection on loans in default and interest charges on all federal student loans. The Biden Administration recently announced that the program will end at the close of the year, which means nearly 43 million Americans with federal student loans will resume making regular payments in January.

While some eligible students may have up to $20,000 of their federal student loans forgiven, those with remaining balances need to get ready to begin making payments again. Although Sallie Mae only offers private student loans, many of our customers may also have federal student loans. Whether federal or private, we’re here to help students get ready to repay their loans.

Check out these ways to prepare for the restart of federal student loan repayment.

1. Create a budget

Your federal student loans probably aren’t your only monthly expense. Maybe you’ve just moved into a new place, or you purchased a car to get you to your new job. Consider your total monthly expenses, including rent, groceries and utilities. Sallie Mae can help you get organized and create a plan on how to stay on top of your finances.

2. Verify your contact information

Ahead of your payment date, your federal student loan servicer will reach out to you with important information about your loan and repayment. Make sure your contact information, especially your email and home address, is up to date. Check now by logging into studentaid.gov.

3. Know how much you owe, and when you owe it

Stay on top of your loan by making sure you know exactly how much you owe and when it’s due. Your payments may not resume on the same day as when you were previously making payments. Look for an email with a billing statement from your federal loan servicer, which should come at least 21 days prior to your payment due date.

Additionally, your payment amount may have changed in the last two years, depending on the remaining time to payback your loan and the current principal and interest balance left. Your billing statement will tell you how much you owe, but you can also find out by logging-in to your account.

4. Confirm enrollment in auto debit

To ensure you make your payments on-time every month, verify your enrollment in automatic payments, known as auto debit. When enrolled, you receive a 0.25 percentage point reduction on your interest rate. Even if you were enrolled in auto debit before the repayment pause, you may have to enroll again. You can sign up through your loan servicer.   

5. Choose a repayment plan

Your financial situation may not look the same as it did two years ago. Find a repayment plan that works for you by using the Department of Education’s loan simulator. Whether you’re looking to pay off your loans faster or you already know you’ll need to lower your monthly payment, there are several repayment options to consider:

• Income-driven repayment (IDR) plans. IDR plans base your loan payments on your income. Requesting an IDR plan could lower your monthly payments.
• Public Service Loan Forgiveness (PSLF) program. The PSLF program offers loan forgiveness on federal student loans for full-time employees of U.S. federal, state, local or tribal governments and nonprofit organizations. Employees are eligible once they’ve made 120 payments under a qualifying repayment plan.
• Request additional relief. If you run into issues making monthly loan payments, contact your federal loan servicer to find out if you qualify for additional relief. For short-term financial hardships, you can request a deferment or forbearance to temporarily suspend payments but understand that may increase what you have to pay back in the long run.

If you have remaining federal student loans to pay back beginning in January, start preparing now to ensure you’re prepared to re-enter repayment as smoothly as possible.