While 81% of college-bound juniors and seniors view college as a path to a better life, only half of them feel confident about being able to finance their college education, according to a recent survey conducted by Ipsos Research for Sallie Mae. The survey examined how this cohort and their families feel about their ability to afford college. In addition, 42% of surveyed families said they need help in planning to pay for college and 43% said there are too few external funding sources to help them cover the costs of college.

The perceptions of the parents regarding college costs are a key component in a student’s decisions about which schools to consider or whether to attend college at all. About 60% of currently enrolled undergraduate families report eliminating at least one college from consideration based solely on cost.

Most families are not aware that many students seldom pay the full “sticker price” for college. Only 18% of college- bound families understand that the amount that many students actually pay is lower than the price of tuition that’s published by a college.

Many Are Unfamiliar with the Financial Aid Process

Surprisingly, only 54% of college-bound families are familiar with financial aid offers or award letters and 37% of those don’t understand what information is included in them. The familiarity of college-bound families with the financial aid process varies significantly by program, as noted below:

• 17% are very or somewhat familiar with Parent PLUS loans,

• 29% are very or somewhat familiar with the Federal Work-Study program,

• 56% are very or somewhat familiar with grants,

• 58% are very or somewhat familiar with Federal student loans, and

• 76% are very or somewhat familiar with scholarships.

Misunderstanding the FAFSA

The Free Application for Federal Student Aid (FAFSA) is fundamental to any student’s search for funds to pay for college. Only the very wealthy can afford to skip the entire Federal financial aid process that originates with submission of the FAFSA. It’s the gateway to Federal financial aid, including Federal grants, work-study, and student loans, and is used by colleges to assess a family’s need for their own institutional aid. It’s also the basis for the determining a student’s eligibility for financial aid from their home state.

Despite this, only 44% of college-bound families are very or somewhat familiar with the FAFSA. More parents are familiar with the FAFSA than students, largely due to their own experience with it. 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 should complete it. Views on it are mixed:

• 34% don’t know any reasons why someone would complete the FAFSA,

• 44% don’t know that it is for all students, and

• 29% of families feel that filling out the FAFSA is a waste of time if parents are making “too much money”.

Even among families who are planning to submit the FAFSA, only 20% say they feel very prepared to complete the application.

Understanding Loans and Repayment

Forty-seven percent of families think they will need to borrow money to help pay for a college education for their child. This proportion matches the percentage of current undergraduate families who used borrowed funds to cover part of the costs for academic year 2020–21. Twenty-two percent of families definitively say they won’t need to borrow, and another 31% aren’t sure whether they will need to borrow.

Families that anticipate the need to borrow are not necessarily aware of the options available to them. Less than half of them were able to correctly identify different types of Federal loans as money that needs to be repaid, as noted below:

• 47% correctly identified Direct Subsidized Loans as money that needs to be repaid,

• 46% correctly identified Direct Unsubsidized Loans as money that needs to be repaid, and

• 41% correctly identified Parent PLUS Loans as money that needs to be repaid

Educating Students and Families About How to Pay for College

An overwhelming proportion of college-bound families indicate that financial topics related to paying for college should be taught in high school, as noted below:

• 74% want students educated on how to pay for college,

• 68% want students educated on student loans, and

• 66% want students educated on how much college costs.

Evening sessions for parents were also viewed as helpful. In addition to learning about ways to pay for college, more than 40% of college-bound families indicate that having access to tools that help them research colleges, majors, and financial aid plus finding out sooner how much they’ll have to pay will help them make college more affordable.


The Sallie Mae research shows that while families view college education as an investment in the student’s future—one that leads to better opportunities—there is confusion and uncertainty when it comes to financing that education. Some parents have the knowledge and tools they need to help plan how to pay for college, but many others, particularly those without a college education, feel overwhelmed. Misconceptions about college costs and lack of understanding of the financial aid process and sources of funding contribute to the stress that many families experience.

The research suggests that introducing the topic of paying for college early in high school is important in empowering families about their ability to finance a college education. High school curricula can arm students and parents with real knowledge and tools to help navigate college financing. By addressing the subject of college financing early, families will have more time to think through their options, develop a plan, and make sound decisions to make college education more affordable.