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Paying for College – A Practical Guide for Families

Jan 19, 2021

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)  PDF opens in a new window 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. Thirteen percent of the cost is funded by student borrowing, 9 percent by parent borrowing, 7 percent from student income and savings, 44 percent from parent income and savings, 36 percent by grants and scholarships, and 1 percent from contributions from other relatives.
 

How Families Pay for College

How Families Pay for College
Type of funding Percentage
Student Borrowing 13%
Parent Borrowing 9%
Student Income and Savings 7%
Parent Income and Savings 44%
Grants and Scholarships 44%
Other forms of funding 1%

 

For Compliance Use Only: 1020303-00002-00

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