How Most Americans Pay for College

Text size: aA aA aA
Many families rely on a combination of financial resources, including out-of-pocket payments and loans, to meet their education expenses. 34% of paying for college is financial aid - $184 billion total aid available in 2015-16, primarily in grants and scholarships. 29% of paying for college is family income and savings including 529s - over $258 billion has been saved in 529 plans. 13% of paying for college is student borrowing - there are a number of federal student loan options, as well as private loans for students. 12% of paying for college is student income and savings - nearly 4 out of 5 college students work during college to help fund tuition and other expenses. 7% of paying for college is parent borrowing - federal loans are also available to parents. 5% of paying for college is gifts from relatives and friends - on average, families who received these gifts used $5,899 to cover college expenses.
Footnote 1 College Board, "Trends in Student Aid 2016," https://trendscollegeboard.org/sites/default/files/2016-trends-student-aid.pdf

Footnote 2 Board of Governors of the Federal Reserve System, https://www.federalreserve.gov/econdata/notes/2016/saving-for-college-and-section-529plans

Footnote 3 Sallie Mae, How America pays for College 2016, https://news.salliemae.com/files/doc_library/file/HowAmericaPaysforCollege2016.pdf

Next steps
Merrill Edge® can help you create a game plan for paying for college. Visit Understanding College Costs for educational resources, online tools, savings accounts and more.

ARXDDMPK-EXP05142020