An annual report from Sallie Mae® and Ipsos has highlighted the latest trends in college affordability for undergraduate students and their parents, and found that costs have risen, while FAFSA submission rates have stabilized following previous years of decline.
The survey, conducted between March 31 and May 8 of 2023, included responses from 986 parents of undergraduate students and 1,213 undergraduate students ranging from ages 18-24, with 226 of the undergraduate students attending HBCUs.
The report found that students, and their parents, reported spending an average of $28,026 on college in the 2022-23 school year, representing an 11% increase from 2021-22.
While that total expense has increased, the funding sources remained consistent with previous years. The bulk of financing, 40%, came from a parents’ income and savings. Institutional funding, like scholarships and grants, accounted for 29% of financing while the remaining costs were covered by student borrowing at 11%, student income and savings at 10%, parent borrowing at 8%, and 2% coming from friends and family.
“For many college families, academic year 2022–23 was the first ‘normal’ school year post-pandemic,” the report noted. “As more students returned to campus, families spent more on college than in the previous two years, with half of college costs funded out-of-pocket.”
But the survey also found that many families are leaving money on the table, with nearly 3 in 10 not submitting a FAFSA.
FAFSA submission rates have experienced volatility and declines during the previous four cycles, but the survey marked the 2022-23 completion rate at 71%, steady with the previous year’s completion rate.
There are, however, concerning trends with the FAFSA. According to the survey 72% of families were unable to correctly identify when the FAFSA becomes available, and lower-income households (making less than $50,000 annually) were more likely than other families to cite awareness and logistical issues as reasons for not completing the form.
Overall, the survey found that 19% of families did not have the information required to complete the application and 20% found the form to be too complicated, while those rates among lower-income families were at 29% and 25% respectively.
“While the planned changes and simplification of the application are likely to ease at least some of the logistical burden, there is a continued opportunity to improve awareness of the process, including when the application is available,” the survey said.
The survey goes on to urge policymakers to help families by improving FAFSA awareness so that families can consider their financial options earlier in the enrollment and application process to better ensure that students from all backgrounds have access to more affordable postsecondary pathways.
“Students and families continue to view higher education as an important investment in their future but are also looking for ways to make it more affordable and consistently eliminate schools from consideration based on cost,” said Jenny Berg, vice president, Ipsos. “Unfortunately, families may be leaving free money on the table due to ongoing confusion about the FAFSA and eligibility for scholarships and grants.”
Publication Date: 8/24/2023