Study: 2024-25 Undergraduate Families Are Reporting Spending More on College
By Maria Carrasco, NASFAA Staff Reporter
Families of undergraduate students reported spending an average of $30,837 on higher education for the 2024-25 academic year, a 9% increase from the previous year, according to a new study from Sallie Mae.
“How America Pays for College” is an annual study by Sallie Mae and Ipsos that tracks how families are financing higher education and the factors influencing their decisions. This study was conducted on 1,000 parents of undergraduate students, ages 18 to 24, and 1,000 undergraduate students, ages 18 to 24.
For the 2024-25 academic year, Sallie Mae found that undergraduate families reported spending an average of $30,837 on higher education. The total amount of $30,837 is split among different payment methods, including payment through parent income and savings, which has an average of $11,729, scholarships and grants at $8,354, student borrowing at $3,669, parent borrowing at $3,453, and other methods.
Compared to the 2023-24 academic year, undergraduate families reported spending an average of $28,409 on higher education.
Notably, 74% of undergraduate families used parent income and savings to help pay for college, contributing an average of $15,754 in the 2024-25 academic year. That number is higher when looking at families who earn $150,000 or more annually, at 87%, and lower for families earning less than $50,000 annually, at 64%.
The study noted the importance of scholarships for families to access higher education. For the 2024-25 academic year, 63% of scholarship recipients received them from their institutions, with an average award of $9,791, 33% received scholarships from their state or local governments, averaging $3,479, and 32% received scholarships from community organizations or businesses, with an average of $2,520.
However, the study also noted that many families have misconceptions about scholarships. For example, 46% said they believe scholarships are only available for students with exceptional grades or abilities, and 36% said they believe students can apply for scholarships only before their freshman year of college.
Looking at student and parent borrowing for 2024-25, Sallie Mae found that 48% of undergraduate families used borrowed funds to help pay for education. Out of these families, 54% reported that only the student borrowed, 32% said only the parent borrowed, and 14% said both the student and the parent borrowed. Notably, federal student loans remained as the most-common form of loan that both parents and students borrowed.
The study also looked at FAFSA for the 2024-25 academic year, which saw a decline in FAFSA submissions. According to the study, 71% of families submitted the FAFSA in 2024-25, which is a decline from the previous year’s 74% submission rate.
The study noted that this decline was likely influenced by the delays and technical errors with FAFSA simplification. Notably, 58% of undergraduate families who submitted the FAFSA reported that they needed help with the application.
Some families skipped the FAFSA altogether, with 29% of undergraduate families reporting they did not complete the form. The most common reason why these families did not complete the FAFSA was because of the belief that the family’s income was too high to qualify for aid, at 34%. Other reasons included a lack information, not having time to complete the form, and more.
Another aspect of the study was around financial aid offers. Seventy percent of undergraduate families reported receiving a financial aid offer from the institution their student attends. Among those families, 38% said their financial aid offer was very easy to understand, 38% said it was somewhat easy, 13% said it was neither easy nor difficult, and 11% found the offer difficult to understand.
There is support among undergraduate families to standardized financial aid offers, with 39% strongly supporting the cause, and 27% somewhat supporting.
“Students and families navigating higher education today need greater transparency when it comes to the actual cost of college so they can make the most informed decisions about this significant investment,” Rick Castellano, vice president of Sallie Mae, said in a statement. “We also need to continue to promote FAFSA completion and reinforce the availability of scholarships, so families don’t inadvertently leave free money on the table.”
Publication Date: 9/5/2025
You must be logged in to comment on this page.