One of my favorite research pieces is the “How American Pays for College” series produced by Sallie Mae and Ipsos. Introduced in 2008, this study examines the views of undergraduates and parents of undergraduates concerning how these families are choosing to fund a college degree. While a blog is no place for a thorough review of the report, below I divide my examination into three sections: Key Findings, Points of Concern, and conclude with Where Do We Go From Here.


  • Both Parties Are Willing to Make Financial Sacrifices:
    • “Parents and students contributed income, savings, or money borrowed in their own names in nine out of ten families” (page 07).
    • Fifty-two percent of students contribute their own income or savings (page 11).
    • The average cost of last year’s financial sacrifice was $23,688 (page 07).
  • Price point Matters:  67% factored price into their selection, 55% eliminated schools due to cost, 44% considered financial aid before making a final choice (page 08).
  • Students are Proactive Cost Cutters: 77% work, 62% cut spending, 49% live at home, 27% shorten their degree program (page 08).
  • Scholarships Are Vitally Important:
    • “Scholarships and grants funded 34 percent of college costs in 2015-16, the largest proportion of any resource used to pay for college in the past five years” (page 09).
    • “Fifty percent of families took advantage of scholarships” in 2015-2016 (page 11).
  • Borrowing is Less Than Expected: “[T]wo in five families borrowed money to pay for college. . . Students borrowed 74 percent of those families, and parents in 35 percent” (page 11).
  • Community Colleges are Competing: “Community college enrollment rose from 23 percent in academic year 2009-10” to 31 percent in 2015-16.
  • Home State Advantage: “Four in five students [80%] were attending college in their home state” (page 19).

Points of Concern:

  • Program or Personal?
    • 31% of students chose their institution based on personal choice, the same amount that chose their institution for its academic programs (page 08).
    • Later personal choice is defined to include “extracurricular activities, religious affiliation, campus layout, student population, family history, etc (page 15).
  • Transfers are Prevalent: “In 40 percent of families, the student was not attending the school he or she had planned originally to attend, switching before or after enrolling” (page 08).
  • Lack of a Game Plan: “Only two in five families [40%] had created a plan for how they would pay for school before the student enrolled” (page 08)
  • Degree over Job Prospects:
    • “[F]amilies nearly universally believed that college is an investment in their student’s future (97%)” (page 08).
    • “Ninety percent of families expected their college student to earn at least a bachelor’s degree. Thirty-six percent anticipated the highest degree earned will be a bachelor’s degree, while more than half (54% expected their student to continue his or her education beyond a bachelor’s degree” (page 25).
  • Planning Short Falls:
    • Of the forty percent of families who borrowed money to pay for school, only forty percent (of those 40%) had planned to use loans as a funding source (page 11).
    • “In families with a plan to pay for college, students borrowed one-third less money while accessing two-and-one half times more parent income and savings, compared to families without a plan” (page 23).


As I look over the key findings and the points of concern, one theme seems to run amongst many of the above: We have a planning problem. The planning problem begins with parents saving for college. Many seem to underestimate the future cost or overestimate their child’s ability to earn scholarships and financial aid. Naturally, this leaves a funding gap, which is normally covered by loans. The problem continues with college selection. If forty percent of students are changing their college choice after enrolling, the plans that were prepared for school one, might not be prepared for school two. Finally, students must plan for a future career first, then select an academic institution. Too many students have bought into the idea that a degree, rather than a career makes one’s future.

On a positive note, it is exciting to see that students appear to be taking more responsibility than ever for their college costs, willing to make contributions and even change their school choice when necessary. I would suggest that this commitment stems from two realities that are finally setting in. First, students realize that their parents do not have the money for college and are making the appropriate changes. Second, students are aware of the debt issues plaguing past classes and are hoping to avoid a similar set of circumstances.

In addition to the report Sallie Mae created an info-graphic with the key statistics of their report. I have included it below. The detailed report discussed in this blog may be found here: