Sallie Mae’s tools aim to demystify the process

Eight in 10 college-bound high school juniors and seniors (81%) view higher education as a path to better opportunities, but only 42% feel confident about financing that education, according “College Confidence: What America Knows About Paying for College,” the latest national study from Sallie Mae and Ipsos, a market research company.

The study examines what college-bound students and their parents understand about financial aid, the FAFSA®, scholarships, and student loans. The research results are based on an online survey Ipsos conducted, in English, with 550 parents of high school juniors or seniors planning on attending college and 585 college-bound juniors or seniors.

Key findings from the study include:

• Nearly three-quarters of families (74%) have started thinking about how they will cover the cost of higher education by the time their child is a high school junior but fewer than half (44%) are very or somewhat familiar with the FAFSA – the gateway to billions of dollars in scholarships, grants, and federal financial aid.

• Just 62% of families plan to complete the FAFSA; 29% feeling it’s a waste of time if the family makes too much money.

• Nearly half of families (45%) believe scholarships are only available for students with exceptional grades or abilities.

• Half of families (54%) are familiar with financial aid offers but 37% of them don’t know what information is included in those offers.

• Nearly half (47%) of college-bound families are planning to borrow to pay for college, but many are unclear on what types of aid needs to be paid back. Less than half of college-bound families correctly identified direct subsidized loans (47%), direct unsubsidized loans (46%), and the Parent PLUS loans (41%) as money that needs to be repaid.

• Only 18% of college-bound families agree that the amount families actually pay is lower than the price advertised by the school.
  
• First-generation college families need additional support as they navigate the financial aid process. Only 35% of first-generation families feel very or somewhat confident about it, compared to 54% of experienced families. Critically, while 42% of first-generation families indicate more Pell Grants and need-based financial aid would help them, only 32% definitely plan to submit the FAFSA®.

To help fill these confidence gaps, Sallie Mae offers a variety of free tools and resources to help families make informed decisions about college.  At salliemae.com/college-planning, they can find tools to calculate college costs, view average financial aid packages from universities around the country, and discover scholarships for all kinds of students. The goal of these tools is to help students and families better understand college costs and encourage them to maximize free money first before borrowing.

To learn more, visit salliemae.com/college-planning.

The private student loan market has stabilized and returned to pre-pandemic norms, according to a new report from MeasureOne, a consumer analytics company.

The study found that the overwhelming majority of students and families are once again making regular payments, despite the continued economic impacts of the pandemic. More than 98% of private student loans are successfully repaid. The report also concluded fewer students and families are relying on customer relief programs, which became popular options early in the pandemic.

As of June 2021, private student loans — which are fully underwritten to assess creditworthiness and ability to repay — make up 7.61% of the $1.7 trillion student loan market. The remaining 92%, or $1.59 trillion in student loans, are federal student loans made by the federal government.

As the leader in private student lending, Sallie Mae recommends families follow a three-step approach to financing their education:

1. Start with money you won’t have to pay back. Supplement your college savings and income by maximizing scholarships, grants, and work-study.
2. Explore federal student loans. We encourage students to explore federal student loan options by completing the FAFSA.
3. Consider a responsible private student loan. Fill the gap between your available resources and the cost of college. We encourage students to evaluate all anticipated monthly loan payments, as well as how much the student expects to earn in the future, before considering a private student loan.

Sallie Mae is committed to helping students achieve their higher education goals. Through a free suite of tools and resources, including planning calculators, college comparison tools, scholarship searches, and FAFSA support, we help students and families maximize their options before borrowing. By providing the necessary resources to help students and families confidently navigate their higher education journey, Sallie Mae can set them up for a lifetime of success.

Read the full report here.

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 matches students with scholarships based on their skills, activities and interests.

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

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, especially considering the obstacles students faced this past year.  

Even after students finish up 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 (34% of students borrowed last year, according to “How America Pays for College”), 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 beginning clear communication with students and cosigners while they’re in school and throughout the life of their loans.

Staying up to date on student loan status

Students have very busy schedules, which is why Sallie Mae makes 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 Mae mobile app to get notifications of their upcoming payments 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.

Sallie Mae also sends students and their cosigners a loan summary each year they are in school, including interest accrued. This is especially important for Sallie Mae 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 Sallie Mae 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. Sallie Mae lets students know at the start of their grace period what their estimated payment amount will be and provides tips on when, where, and how to pay on time.

Sallie Mae also offers tools to help students prepare for repayment, such as a monthly budget worksheet, which helps students create a budget to meet their financial goals. The company also partners with Handshake, a job search tool, to provide students with greater access to career opportunities.

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, Sallie Mae helps ensure the next generation of future leaders can not only meet their loan payments, but make strides toward their financial goals.  

The ‘college talk’ should include how to pay for it

College acceptance letters have been delivered to millions of students across the nation. As students weigh their options, they’ll consider campus life and academic quality, but one critical factor in choosing the right college is often rushed at this most consequential moment: how to pay for it.

Even though paying for college represents one of the first significant financial commitments a young person will make, many don’t have comprehensive discussions about how to manage that cost. According to a 2020 survey conducted by Ipsos and Sallie Mae®, 90% of families have discussions about college, but only two-thirds of families actually discuss the financial logistics.

The survey also found that those who plan ahead for college are three times more likely to feel confident about how they will afford it. This is one of the many reasons why Sallie Mae encourages students to discuss their options early and provides free tools to help students and their families navigate the college decision — and financing — process.

Ask questions about the financing process

The college process is constantly changing, and family members and other trusted adults who are looking at financing options with a student might be surprised. What they may recall from their own experiences — whether a few years ago or a few decades ago — has likely changed. An early start will give everyone the time and space to weigh all options.

The best way to begin is by asking questions — and getting answers — about your specific needs. Having a plan will allow you to compare financial aid offers and factor scholarships and grants into your financing formula. Just as important is considering the additional costs beyond tuition. Room and board, books, computers, and transportation can add up very quickly.  

Sallie Mae suggests a three-step approach to help with college financing planning:

1. Begin with money students won’t have to pay back, such as scholarships, grants, and work-study. These can become critical tools to help students and families make college more affordable because they help reduce the total price tag. Even so, it can be difficult to understand where to find them and how they fit into a student’s greater college financial plan.
   
   Sallie Mae offers a number of free tools to help students access and understand their options, including a scholarship search tool, and you don’t have to be a Sallie Mae loan customer to access them. Families should also utilize planning calculators to get a sense of the bigger paying-for-college picture. Sallie Mae’s planning calculator allows students to enter savings, scholarships, grants and loans and see the full cost of attending a school. 
   
2. Explore federal student loan options, which account for about 90% of today’s outstanding college loans. That starts with completing the Free Application for Federal Student Aid (FAFSA®). Unfortunately, too many families skip the FAFSA because they think it’s too complicated or that they won’t qualify for financial aid. This oversight means potentially missing out on thousands of dollars in financial aid. 
   
3. Turn to a private student loan to fill the gap. After maximizing scholarships, grants and other federal financial aid, Sallie Mae helps students fill any financing gap by offering private student loans. Often secured with a cosigner, private student loans go through underwriting to ensure customers will be able to manage them successfully. Students and their families are encouraged to evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.

By having the talk about how to pay for college now, students will be better prepared to make informed decisions that will serve them today and for years to come. They will enter their college years with more confidence that the financial obligations they are assuming are prudent and manageable.

It’s why Sallie Mae is working to bridge the knowledge gap in financial literacy — so students can make thoughtful decisions now that will set them up for the life they want.

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

Minimizing student loan debt to maximize borrowers’ long-term success

Statistics behind student loans are sobering. Today’s higher education financing system has left 44.7 million borrowers with nearly $1.6 trillion in student loan debt. On average, students took out about $28,800 each to pay for college in the 2018-2019 school year.

Going to college should not burden students or their families with loans they are not able to repay. Preventing these situations requires empowering borrowers with the information, resources, and tools needed to make smart financial decisions about higher education.

From a free scholarship search tool to partnerships that yield greater access to finances and know-how, Sallie Mae® aims to help ensure students don’t pay more for higher education than necessary, and graduate from college with only the debt they can reasonably afford to repay.

Here are three ways Sallie Mae helps students and families pay for college — without loans:

Free scholarship search tool

Before applying for loans — whether federal or private — Sallie Mae recommends every student first explore scholarships and grants. In the 2019-2020 academic year, 58% of families used scholarships to pay for college, the second largest source of funding after student loans.

Sallie Mae offers a scholarship search tool to help students find free money for college. The search tool opens doors to a variety of scholarships based on majors, locations, and even unique interests.

Financial planning resources

One of the most important, and less addressed, steps to prepare for college is making a plan for how to save and pay for it. We know that smart financial planning is key to students’ future success before, during, and after college. That’s why Sallie Mae’s mission emphasizes the value of financial literacy through its services and helps students prepare responsibly.

With this in mind, Sallie Mae offers a variety of calculators at no cost to help students and their families build their personalized college financial plan, estimate their monthly student loan payments after college, predict future college costs, understand the impact of interest on their loans, and see how much they can potentially save for the future. Importantly, these services are available to everyone — whether they have loans with Sallie Mae or not.

The Sallie Mae Fund Bridging the Dream Scholarship Program

In partnership with the Thurgood Marshall College Fund, Sallie Mae launched The Sallie Mae Fund Bridging the Dream Scholarship Program in 2021, which will provide $3 million in scholarships over the next three years to support nearly 900 minority students and others from historically underserved communities in their pursuit of higher education. The program is an evolution of an initiative launched in 2015, which provided nearly $1 million to high school and graduate students to help them access higher education.

This program aims to ensure more minority, LGBTQ+, low income, and first-generation college students are able to access higher education and complete their degrees. Minority students are less likely to finish college compared to white students (47% completion rate for white students in 4 years compared to 22% and 33% completion rate for Black and Hispanic students in 4 years, respectively).

The Sallie Mae Fund Bridging the Dream Scholarship Program is part of a $4.5 million commitment made to support educational programs that advance social justice, diversity, inclusion, and equality. 

At the end of the day, financing higher education comes down to smart planning and careful preparation. Sallie Mae is committed to bridging the gap for students and their families by helping them better plan and pay for college.