How Does the Typical American Family Pay for College?

Posted By Terri Williams on October 28, 2015 at 5:03 pm
How Does the Typical American Family Pay for College?

For many Americans, a college degree is a stepping-stone to achieving the American Dream. However, it’s an expensive stepping-stone. The average family spent $24,164 on college during the 2014-2015 academic year, a 16 percent increase from the previous year.

How America Pays for College 2015, an extensive report conducted by the Ipsos market research firm for Sallie Mae, examines the increasing cost of attending college and how American families are paying for higher education.

Spending for families at every type of college increased during the 2014-2015 school year. Below is a breakdown of how costs changed from the previous year:

Institution type Percentage increase Dollar amount increase
Two-year public colleges 23% $13,531
Four-year public colleges 10% $23,189
Four-year private colleges 20% $41,857


How does the typical American family pay for college? These are the top six sources:

Percent Source
32% Parent income and savings
30% Scholarships and grants
16% Student borrowing
11% Student income and savings
6% Parent borrowing
5% Relatives and friends


When combined, 43% of parents and students used their assets to cover costs, making this the primary source of funding.

Compared to last year, the amount contributed by parents increased by 22%. Student borrowing also increased by 22%. Grants and scholarships increased by 12 percent, and student contributions increased by 5%. The 2014-2015 school year marked the first time in five years that parental contributions surpassed scholarships and grants as the primary funding source.

However, the largest one-year change was in contributions from friends and relatives, which increased by 40%. The average contribution from this source was $354. Parental borrowing was the only category to decrease, and it was only by 1%.

Student loan trends

The majority of families (62%) did not borrow money during the 2014-2015 academic year. Students at a four-year private school were more likely to borrow money than those at four-year or two-year public colleges (56% vs. 43% vs. 22%).

Among the families that borrowed money, the student signed for the loan in 83% of the cases. The majority of students had a federal student loan, and a small percentage had either a combination of federal and private or only a private loan.

Working students

Almost three-quarters (74%) of students were employed during the 2014-2015 school year. Most of these students were employed year-round (as opposed to working on spring break, during summer months, etc.), and worked an average of 22 hours a week. Year-round working students were more likely to be responsible for helping to pay their college costs (11% vs 6% of overall students).

Students who worked year-round were also more likely to look for other ways to cut costs and save money. For example, 66% of year-round students increased their working hours when possible, and 54% either lived at home or with relatives.


Jayne Schreck, Associate Vice President for Financial Aid at Monmouth College, advises students and their parents to seek out scholarships and grants to help defray the cost of college. “Although hard work and high academic accomplishments often earn academic scholarships, there are also other types of scholarships that are awarded on leadership ability, participation in certain activities, et cetera.”

And Jennifer Lee Magas, an English professor at Fairfield University, adds, “In the wake of growing tuition payments and demanding deadlines, we all know college students are feeling pressured to make ends meet.  Consequently, they are reportedly working more in order to help pay for their education.”

She says that juggling the responsibilities of a job and challenging course schedule is not easy, but can actually be an asset if done right. “Employers are no longer just looking for good grades and specific majors – they are looking for skill sets, and a part-time job can be advantageous to students with good time management skills.”

And because more students are seeking part-time employment, Stephanie Kinkaid, Assistant Director
 at Wackerle Career and
 Leadership Center at Monmouth College, says demand on their campus exceeds the supply of jobs they can offer.

“Many students are required to complete an internship, and in our career center, we strongly suggest that every student complete at least one. But, students are often forced to overlook unpaid opportunities because they need an income,” sys Kinkaid.

While there are many critics of students working in college, Kinkaid says employment while in college can be beneficial for several reasons. “The students are gaining real world experiences that can actually be translated into classroom projects to enhance learning.”

Kinkaid says students also have opportunities to work with the public, which many employers see as a positive, and students are building a network of potential employers for after graduation and for internships.

”As young adults learn to navigate the world of bills and expenses, more and more college students are working to pay for tuition. Learning valuable communication and problem-solving skills may help them secure jobs after graduation,” says Kinkaid.

Terri Williams
Terri Williams graduated with a B.A. in English from the University of Alabama at Birmingham. Her education, career, and business articles have been featured on Yahoo! Education, U.S. News & World Report, The Houston Chronicle, and in the print edition of USA Today Special Edition. Terri is also a contributing author to "A Practical Guide to Digital Journalism Ethics," a book published by the Center for Digital Ethics and Policy at Loyola University Chicago.

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