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Paying for College – A Practical Guide for Families

Sep 09, 2019

Key Takeaways

  • New graduates may struggle on whether to pay off student loans or save for retirement.
  • Before defaulting or deferring, check into federal loan repayment and loan forgiveness options.
  • Some employers offer student loan assistance programs as a new type of employee benefit.


If you have a son or daughter who will soon be going to college you will likely find yourself awash in a sea of new terminology—the FAFSA form, Estimated Family Contribution, the CSS PROFILE, to name just a few—along with a dizzying array of financial aid vehicles, including grants, scholarships, work-study programs, and an assortment of federal loan programs. Each comes with its own unique terms and its own rules for eligibility.
The Paying for College – A Practical Guide for Families (PDF) is designed to be a short, succinct guide to help parents make informed decisions about when, where, and how to assemble a financial aid package that makes sense for their family. It is aimed not at the family trying to figure out how to save for college—although some of its information will be helpful on that front—but rather at the family knocking on college’s door and trying to figure out how to actually pay the bill.


How Families Pay for College Today

The typical family today relies on a web of resources to pay for college. Fifteen percent of the cost is funded by student borrowing, 7 percent by parent borrowing, 12 percent from student income and savings, 30 percent from parent income and savings, 31 percent by grants and scholarships, and 4 percent from contributions from other relatives.

How Families Pay for College

How Families Pay for College
Type of funding Percentage
Student Borrowing 15%
Parent Borrowing 7%
Student Income and Savings 12%
Parent Income and Savings 30%
Grants and Scholarships 31%
Other forms of funding 4%
In 31 percent of families, the student provides all funds not covered by financial aid. In another 31 percent of families, parents pay enough of the costs such that the student pays nothing, either out-of-pocket or borrowed.

Family Contributions

Family Contributions
Source Percentage
Student Only 31%
Parent Only 31%
Shared 38%


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