How AmericA PAys for college 2012

sallie mae’s National study of college students and Parents conducted by ipsos Public Affairs

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ABOUT SALLIE MAE®
Sallie Mae (NASDAQ: SLM) is the nation’s No. 1 financial services company specializing in education. Whether college is a long way off or just around the corner, Sallie Mae turns education dreams into reality for its 25 million customers. With products and services that include college savings programs, scholarship search tools, education loans, insurance, and online banking, Sallie Mae offers solutions that help families save, plan, and pay for college. Sallie Mae also provides financial services to hundreds of college campuses as well as to federal and state governments. More information is available at www.SallieMae.com. Sallie Mae 300 Continental Drive Newark, DE 19713

ABOUT IPSOS PUBLIC AFFAIRS®
Ipsos is an independent market research company controlled and managed by research professionals. Founded in France in 1975, Ipsos has grown into a worldwide research group with a strong presence in all key markets. In October 2011, Ipsos completed the acquisition of Synovate. The combination forms the world’s third-largest market research company. With offices in 84 countries, Ipsos delivers insightful expertise across six research specializations: advertising, customer loyalty, marketing, media, public affairs research, and survey management. Ipsos researchers assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media and they measure public opinion around the globe. Ipsos has been listed on the Paris Stock Exchange since 1999 and generated global revenues of €1,363 billion (1.897 billion USD) in 2011. Visit www.ipsos-na.com to learn more about Ipsos offerings and capabilities. Ipsos Public Affairs 1146 19th Street NW, Suite 200 Washington, DC 20036

Access a related infographic and other information about this study at www.SallieMae.com/HowAmericaPays.

© 2012 Sallie Mae, Inc. All rights reserved. The Sallie Mae logo and Sallie Mae are registered service marks of Sallie Mae, Inc. SLM Corporation and its subsidiaries, including Sallie Mae, Inc., are not sponsored by or agencies of the United States. Other logos are trademarks or service marks of their respective owners. SMSM MKT5329 0712

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tAble of coNteNts

1: ABOUT THIS STUdy __________________________________________________________ 5 2: OvERvIEw OF FIndIngS ______________________________________________________ 6 3: dISCUSSIOn OF FIndIngS _____________________________________________________ 8
College spending declines for the second year running .......................................................................................................................................................................................... 8 American parents respond to a difficult economy ................................................................................................................................................................................................. 10 Families taking more measures to reduce the cost of college .............................................................................................................................................................................. 14 Families are collectively responsible for meeting the costs of their college choices ......................................................................................................................................... 16

4: THE ROLE OF vARIOUS FUndIng SOURCES ___________________________________________ 18 5: STUdEnTS wHO BORROw PRIvATE EdUCATIOn LOAnS ____________________________________ 21 6: COLLEgE STUdEnTS And CREdIT CARdS ____________________________________________ 23 7: dATA TABLES ____________________________________________________________ 25 8: TECHnICAL nOTES _________________________________________________________ 50 FIgURES __________________________________________________________________
Figure 1: Average Amount Paid for College, year-over-year, by Income Level .......................................................................................................................................................6 Figure 2: How the Typical Family Pays for College: Percent of Total Cost of Attendance Paid from Each Source 2011-2012 ...............................................................................7 Figure 3: How the Typical Family Pays for College, year-over-year ........................................................................................................................................................................8 Figure 4: Student Use of Federal Student Loans, year-over-year ............................................................................................................................................................................9 Figure 5: How the Typical Low-Income Family Pays for College, year-over-year.................................................................................................................................................10 Figure 6: How the Typical Middle-Income Family Pays for College, year-over-year ............................................................................................................................................11 Figure 7: How the Typical High-Income Family Pays for College, year-over-year ................................................................................................................................................11 Figure 8: Parents’ Attitudes toward College, Rated Strongly Agree, year-over-year ............................................................................................................................................12 Figure 9: Students’ Attitudes toward College, Rated Strongly Agree, year-over-year...........................................................................................................................................12 Figure 10: Parents’ Reasons for Attending College, Rated Strongly Agree, year-over-year .................................................................................................................................13 Figure 11: Students’ Reasons for Attending College, Rated Strongly Agree, year-over-year ...............................................................................................................................13 Figure 12: Cumulative Elimination of Schools Based on Cost, year-over-year......................................................................................................................................................14 Figure 13: Percent of Families Filing the FAFSA, by Income, year-over-year........................................................................................................................................................15 Figure 14: College Selection decision Maker...........................................................................................................................................................................................................16 Figure 15: Paying for College decision Maker .........................................................................................................................................................................................................16 Figure 16: Family Had a Plan for Paying for All years of College, by Income, year-over-year .............................................................................................................................17 Figure 17: Student Loan Borrowing by Loan Type....................................................................................................................................................................................................21 Figure 18: Student Private Education Loan Borrowing by School Type ..................................................................................................................................................................22 Figure 19: Credit Card Usage by grade Level, year-over-year ...............................................................................................................................................................................23 Figure 20: Average Outstanding Credit Card Balances ............................................................................................................................................................................................24

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TABLES ___________________________________________________________________
Table 1a: The Role of various non-borrowed Funding Sources Used to Pay for College, Frequency of Sources and Average Amounts Used ..................................................18 Table 1b: The Role of various Borrowed Funding Sources Used to Pay for College, Frequency of Sources and Average Amounts Used ..........................................................19 Table 2: Average grant and Scholarship Amounts ...................................................................................................................................................................................................25 Table 3: Scholarship Source......................................................................................................................................................................................................................................26 Table 4: Use of Student Income and Savings ...........................................................................................................................................................................................................26 Table 5: Use of Parent Income and Savings .............................................................................................................................................................................................................27 Table 6: Use of Payment Plan ....................................................................................................................................................................................................................................27 Table 7: Use of Funds from Relatives and Friends ...................................................................................................................................................................................................28 Table 8: who Contributed Borrowed Funds ..............................................................................................................................................................................................................29 Table 9: Use of Parent Borrowed Funds....................................................................................................................................................................................................................30 Table 10: Use of Student Borrowed Funds ................................................................................................................................................................................................................30 Table 11a: Composite of College Funding Sources: Average value Contributed from Each Source, by Income Level .........................................................................................31 Table 11b: Composite of College Funding Sources: Average value Contributed from Each Source, by Race or Ethnicity ...................................................................................31 Table 11c: Composite of College Funding Sources: Average value Contributed from Each Source, by School Type ...........................................................................................32 Table 11d: Composite of College Funding Sources: Average value Contributed from Each Source, by Family Borrowing Status ......................................................................32 Table 12a: Composite of College Funding Sources: Average Percent of Total Cost of Attendance Met by Each Source, by Income Level..........................................................33 Table 12b: Composite of College Funding Sources: Average Percent of Total Cost of Attendance Met by Each Source, by Race or Ethnicity....................................................33 Table 12c: Composite of College Funding Sources: Average Percent of Total Cost of Attendance Met by Each Source, by School Type ............................................................34 Table 12d: Composite of College Funding Sources: Average Percent of Total Cost of Attendance Met by Each Source, by Family Borrowing Status .......................................34 Table 13: Completed FAFSA Application....................................................................................................................................................................................................................35 Table 14: FAFSA Application Ease of Use ..................................................................................................................................................................................................................35 Table 15: Reasons did not Complete FAFSA Application ..........................................................................................................................................................................................35 Table 16: Total Cost of Attendance.............................................................................................................................................................................................................................36 Table 17: Enrollment by Type of School ....................................................................................................................................................................................................................36 Table 18: Enrollment by Home State .........................................................................................................................................................................................................................37 Table 19: Student Course of Study ............................................................................................................................................................................................................................37 Table 20: Elimination of Colleges Based on Cost ......................................................................................................................................................................................................38 Table 21: More Affordable Actions ............................................................................................................................................................................................................................39 Table 22: Attitudes toward College, Rated Strongly Agree .......................................................................................................................................................................................40 Table 23: Attitudes toward College, Scale 1-5..........................................................................................................................................................................................................40 Table 24: Reasons for Continuing Education, Rated Strongly Agree .......................................................................................................................................................................41 Table 25: Reasons for Continuing Education, Scale 1-5 ..........................................................................................................................................................................................41 Table 26: Parent Economic Concerns, Rated Extremely worried ............................................................................................................................................................................42 Table 27: Parent Economic Concerns, Scale 1-5 .....................................................................................................................................................................................................42 Table 28: Use of Tuition Insurance ............................................................................................................................................................................................................................43 Table 29: College Selection decision-Making ..........................................................................................................................................................................................................44 Table 30: Paying for College decision-Making ........................................................................................................................................................................................................44 Table 31: Financial Plan for College ..........................................................................................................................................................................................................................44 Table 32: Parent and Child Responsibility for Paying for College............................................................................................................................................................................45 Table 33: Responsibility for Repaying Parent Loans ................................................................................................................................................................................................45 Table 34: Responsibility for Repaying Student Loans ..............................................................................................................................................................................................46 Table 35: Student Money Management Ability ..........................................................................................................................................................................................................46 Table 36: debit Card and Credit Card Ownership .....................................................................................................................................................................................................47 Table 37: Student Credit Card Holder ........................................................................................................................................................................................................................48 Table 38: Student Outstanding Credit Card Balance.................................................................................................................................................................................................49 Table 39: Parent Monthly Payment on Student Credit Card .....................................................................................................................................................................................49

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About tHis study

Sallie Mae has conducted How America Pays for College annually since 2008, providing information about the resources American families invest in an undergraduate college education. This study focuses particularly on the planning and payment behaviors in a given academic year. Unlike other studies which focus solely on educationspecific sources of funding, this study assesses all of the resources families use, including non-educationspecific sources of saving and borrowing such as retirement funds or credit cards. This comprehensive point of view illustrates the shared responsibility Americans have in paying for college, both within and outside of the families with a student attending college. How America Pays for College depicts the average amounts and proportion of total costs paid from each funding source that a “typical” family pays for college. The “typical” family is a composite representation produced mathematically from the results of the survey questions about how and how much respondents paid for college spread across all families. Now in its fifth year, the study allows tracking over time of changes in funding choices and amounts paid.

How America Pays for College focuses on undergraduate students ages 18 to 24. Each survey year, half of the survey population is enrolled 18 to 24 year-old undergraduates and half is the parents of enrolled 18 to 24 year-old undergraduates. For details on methodology, please see the Technical Notes section. Questions about paying for college specifically reference the July 1–June 30 academic year ending in the year referenced. Thus the survey conducted in 2012 covers amounts paid in academic year 2011-2012; 2011 covers academic year 2010-2011 and so on. For yearover-year comparison purposes, the report references the survey year (e.g., 2012, 2011, 2010, 2009, and 2008). Interviews take place in the spring, during the second half of the academic year. The timing of the interviews allows families to report actual amounts that they used (vs. projected amounts) to meet the cost of college that year. As the nation’s No. 1 financial services company specializing in education, Sallie Mae is committed to presenting findings from this study on a regular basis.

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overview of fiNdiNgs

Sallie Mae’s 2012 How America Pays for College study, conducted by Ipsos Public Affairs, demonstrates that the dramatic post-recession decline in American families’ spending on college first seen in 2011 has continued in 2012. The nationally representative survey of 1,600 dependent undergraduate college students and parents reveals that the average amount families spent on college declined by 5 percent in 2012. American families reported taking more costsaving measures and more families report making their college decisions based on the cost they can afford to pay. FIgURE 1 — AvERAgE AMOUnT PAId FOR COLLEgE,1 yEAR-OvER-yEAR, By InCOME LEvEL
$35,000 $31,245 $30,000 $23,817 $21,040 $20,000 $17,200 $16,910 $15,000 $15,130 $10,000 $19,435 $17,383 $16,955 $17,404 $24,097 $22,628 $25,760 $21,889 $21,347 $19,888 $25,617

$25,000

$20,902 $20,065 $19,159

$5,000

$-

AY 2007-2008

AY 2008-2009 Total families

AY 2009-2010

AY 2010-2011 High-income families

AY 2011-2012

Low-income families

Middle-income families

Parents have led the decline in spending on college education, funding 28 percent of college costs from their savings and income in academic year 20112012. Two years ago, parents reached deeply into their pocketbooks to meet the higher costs of college. However, this level of spending proved unsustainable. This year, parents cut the amount contributed through savings and income substantially, by 11 percent from last year, and by 32 percent from two years ago. Specifically, they have reduced the amount contributed from their current income by 4 percent, and from savings by 22 percent since 2011.
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The total amount paid represents the sum of the itemized sources that families used to pay for college averaged across all families, including grants and scholarships, contributions from income and savings, assistance from friends and family, and borrowing. See tables 11a-d and 12a-d.

Another major decline in contributions came from colleges themselves — the primary donors of scholarship money — with the proportion of families receiving scholarships down to 35 percent in 2012 from 45 percent in 2011. In 2011, families had reported a surge of grants and scholarships, especially among middle-income families, offsetting the decline in parent contributions. Similar to the 2010 surge in parent contributions, the higher levels of scholarships proved unsustainable, suggesting that colleges, too, are feeling the impacts of a difficult economic climate, constraints on endowments, and tighter budgets. Grants and scholarships still fund a higher share of college costs than they did in 2009 and 2010 but the 29 percent share is lower than last year’s one-third share. |6| return to table of contents

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FIgURE 2 — HOw THE TyPICAL FAMILy PAyS FOR COLLEgE: PERCEnT OF TOTAL COST OF ATTEndAnCE PAId FROM EACH SOURCE 2011-2012

overview of fiNdiNgs

Student Borrowing

18% 9%

Grants & Scholarships

Parent Borrowing

29%

Relatives & Friends 4% Parent Income & Savings

28%

Student Income & Savings

12%

To offset the shortfall from diminishing parent savings and income contributions, students funded a higher share of college costs than in previous years, paying 18 percent of the costs through borrowing and 12 percent from income and savings. The increase in borrowing comes from an increase in the use of federal loans. This was particularly the case in high-income families, with 27 percent of high-income students using federal loans in 2012, compared with 19 percent in 2011. In 2012, families demonstrated increasing cost consciousness in their approaches to paying for college. This year’s survey confirms the movement to lower-cost schools initially seen in 2011. Furthermore, families increasingly rejected schools based on cost earlier in the application process. To cut costs, more than half of students lived at home while they attended college this year, up nearly 9 percent from last year. Most families also reported cutting personal spending or working longer hours to meet the costs of college.

This year, the How America Pays for College study explores more deeply how families make decisions about choosing and paying for college. Decision-making about which college to attend and how to pay is not a collaborative process in most families. Instead, responsibility tends to lie solely with either the parent or the student. Students from low-income families have much greater decision-making power than their highincome counterparts. Despite families seeking lower prices and greater value in their college choices, financial planning for the payment of college expenses remains low – just 39 percent of families had a plan for paying for college before enrollment.2 This differs markedly by income group, with high-income families, unsurprisingly, more likely to have had a plan than low-income families.

The 2012 How America Pays for College infographic illustrating key data points is available at www.SallieMae.com/HowAmericaPays.

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In its forthcoming study, How America Saves for College, Sallie Mae will explore the planning and savings habits of parents of children ages 18 and under.

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COLLEgE SPEndIng dECLInES FOR THE SECOnd yEAR RUnnIng
In the 2012 How America Pays for College study, representing academic year 2011-2012, average total spending has declined for the second year in a row, by 5 percent to $20,902, as the aftermath of the recession continues to have an impact on the amount families pay for college. FIgURE 3 — HOw THE TyPICAL FAMILy PAyS FOR COLLEgE, yEAR-OvER-yEAR
Average Amounts
100% $30,000 90% 14% 9% 14% 10% 15% 7% 18% 9%

Funding Source Share

$25,000

$24,097
$3,396

80%

$21,889
$3,180 $1,573

$20,000

$20,902
$3,719 $1,832

70% 60% 50% 40% 30% 20% 10% 0% 25% 23% 11% 10% 6% 9% 7% 33% 4% 12% 4% 30% 36% 37% 28%

$19,435
$2,721 $1,749

$2,261

$15,000

$8,752 $6,664

$10,000

$5,955 $2,314 $1,944 $1,1 66 $4,859 $1,682 $5,692 $2,392 $956 $7,124

$5,955

$2,555 $764 $6,077

$5,000

29%

$0

AY 2008-2009

AY 2009-2010

AY 2010-2011

AY 2011-2012

AY 2008-2009

AY 2009-2010

AY 2010-2011

AY 2011-2012

Student Borrowing Parent Borrowing

Parent Income and Savings Student Income and Savings

Relatives and Friends Grants and Scholarships

In 2012, families shifted how they paid for college in three major ways. First, parents cut their contributions from income and savings. In 2012, parents spent an average of $5,955 from their income and savings, down from $6,664 in 2011. This is 32 percent lower than in 2010, when parent spending peaked at $8,752. Parents’ income and savings paid for 28 percent of college costs, slightly below last year’s share (30%) but significantly below prior years’ (37% in 2010 and 36% in 2009). At 58 percent of all families, this is the lowest percent of families drawing from parent income and savings in the past four years’ survey results and significantly below the last two years.

Second, in 2012, fewer families utilized scholarships: 35 percent of all families in 2012, down from 45 percent in 2011. This decline may be because colleges are unable to maintain previous award levels. In 2012, grant usage remained elevated for the second year in a row, at 45 percent of families qualifying for grants, likely resulting from a substantial investment by the federal government to make Pell Grants available to more families. As a percentage of total college costs, grants and scholarships covered 29 percent of college expenditures in 2012, a higher share than in 2009 or 2010, but lower than last year.

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Third, students paid more out of pocket, partially offsetting decreases in parent and scholarship contributions. This year, students picked up an increased share of their college costs through their own savings and income, contributing on average $2,555 in 2012 (12% of the total cost of college). In addition to contributing more from their savings and current income, students borrowed more in 2012 than in previous years. In 2012, students contributed 18 percent of the total cost of college through borrowing, an average of $3,719 compared with $3,180 in 2011.

The continuing upward trend in the percent of students using federal student loans has driven most of the increase in student borrowing, which has grown from 25 percent in 2009, to 28 percent in 2010, to 30 percent in 2011, and to 34 percent in 2012. This year, high-income students in particular increased their use of federal loans substantially — 27 percent used federal loans in 2012, up from 19 percent in 2011. In addition, the average amount students borrow from federal loans has risen substantially (55%) over the last five years, to $7,874 in 2012 from $5,075 in 2008. The percentage of students borrowing from non-federal loan sources, such as private loans (10%) and credit cards (3%), has remained consistent in the five years of this study.

discussioN of fiNdiNgs

FIgURE 4 — STUdEnT USE OF FEdERAL STUdEnT LOAnS, yEAR-OvER-yEAR
$8,000 $7,000 $6,000 $5,000 $4,000 $3,000 40% 35% 30% 25% 20% 15%

Average Amount Borrowed

Percent Who Borrowed

$5,075
AY 2007-2008

$5,327

$5,807

$6,983

$7,874

$2,000

28%

25%

28%

30%

34%

10% 5% 0%

$1,000 $0

AY 2008-2009

AY 2009-2010

AY 2010-2011

AY 2011-2012

AY 2007-2008

AY 2008-2009

AY 2009-2010

AY 2010-2011

AY 2011-2012

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AMERICAn PAREnTS RESPOnd TO A dIFFICULT ECOnOMy
The decline in parents’ contributions toward the total amount families spend on college represents a major shift in spending that began in 2011 and continued this year. Parents’ contributions, including contributions from income, savings, and borrowing, represent 37 percent of the total amount spent on college in 2012, down from its peak of 47 percent of the total amount spent in 2010. While parents remain the highest contributors to an undergraduate’s education, particularly those in middleand high-income families, they reduced their personal expenditure on college in 2012. The average amount contributed from parents’ current income in 2012 was $4,025, compared to $4,182 in 2011 and $4,975 in 2010. Middle-income families reduced their spending from income the most, to the lowest level in the four years of results on non-borrowed sources. Low-income families maintained last year’s increase in parent income contributions. This year, parent contributions from savings have decreased to $1,930, from $2,482 in 2011. While a similar number of parents used college savings plans as in previous years, the average contribution from this source is down to an average of $820, from $1,481 in 2011. This suggests that the availability of parents’ savings has diminished. Parent borrowing rose to an average of $1,832 in 2012, a 9 percent share of the total amount spent for college, after dipping in 2011 to $1,573 (7% of the total) from a high of $2,261 in 2010 (10% of the total). In particular, middle- and high-income parents relied more on Federal PLUS loans, which contributed an average of $978 and $1,073 respectively in 2012, up from $636 and $628 respectively in 2011. Parent contributions from borrowing made up 4 percent of the total amount low-income families spent on college, significantly smaller than middle- and highincome parents’ shares from borrowing, at 11 percent and 10 percent respectively. Low-income parents contributed less from borrowed sources in 2012 than in 2011, down to $765 from $1,272.

FIgURE 5 — HOw THE TyPICAL LOw-InCOME FAMILy PAyS FOR COLLEgE, yEAR-OvER-yEAR
Average Amounts
100% 90% $20,000 19% 5% 14% 13% 7% 15% 3% 12% 6% 16% 5% 23% 4% 16% 19% 6% 19% 20% 4% 20%

Funding Source Share

$19,890 $16,955 $17,404
$4,014 $708 $2,850 $2,330 $2,660 $601 $1,124 $3,774 $1,272 $3,878

$19,159
$3,908 $765 $3,836

80% 70% 60% 50% 40%

$15,000

$3,231 $847 $2,332

$10,000

$2,173 $1,222

$2,976 $869

30% 20% 42% 38% 38% 36%

$5,000
$7,150 $6,571 $7,512 $6,805

10% 0%

$0

AY 2008-2009

AY 2009-2010

AY 2010-2011

AY 2011-2012

AY 2008-2009

AY 2009-2010

AY 2010-2011

AY 2011-2012

Student Borrowing Parent Borrowing

Parent Income and Savings Student Income and Savings

Relatives and Friends Grants and Scholarships

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FIgURE 6 — HOw THE TyPICAL MIddLE-InCOME FAMILy PAyS FOR COLLEgE, yEAR-OvER-yEAR
Average Amounts
$25,000 100%

discussioN of fiNdiNgs

Funding Source Share
90% 17% 10% 15% 12% 15% 7% 11% 30% 19%

$22,628
$20,000
$3,443

$21,347
$3,210 $1,522

$20,065
$3,734 $2,162

80% 70% 60% 50%

$17,383
$15,000
$2,966 $1,695

$2,639

31%

32%

26%

$7,149

$6,315 $5,312

$10,000

$5,319 $2,461 $2,101 $2,332 $757 $2,283 $681 $7,211

40% 30% 20% 10% 0%

11% 12% 5% 11% 8% 23% 34% 4%

11% 3%

$5,000

$885 $4,417

$1,750

$5,186

$5,894

25%

29%

$0

AY 2008-2009

AY 2009-2010

AY 2010-2011

AY 2011-2012

AY 2008-2009

AY 2009-2010

AY 2010-2011

AY 2011-2012

Student Borrowing Parent Borrowing

Parent Income and Savings Student Income and Savings

Relatives and Friends Grants and Scholarships

FIgURE 7 — HOw THE TyPICAL HIgH-InCOME FAMILy PAyS FOR COLLEgE, yEAR-OvER-yEAR
Average Amounts
$35,000

Funding Source Share

$31,245
$30,000
$3,024 $2,794

$25,000

$25,761
$2,306 $2,093

$25,617
$3,399 $2,591

$23,817
$1,857 $2,497 $15,076

100% 90% 80% 70%

8% 10%

10% 9%

9% 8%

13% 10%

$20,000

$11,204

$15,000

$12,092

$10,744

60% 50%

51%

48%

43%

42%

$10,000
$1,453

$1,945 $2,387

40%
$2,604 $1,143 $2,615 $818

30% 20% 10% 0%

6% 5% 19%
AY 2008-2009

6% 8% 19%
AY 2009-2010

10% 4% 25%

10% 3% 21%

$5,000

$1,276 $6,019 $6,411

$4,642

$5,451

$0

AY 2008-2009

AY 2009-2010

AY 2010-2011

AY 2011-2012

AY 2010-2011

AY 2011-2012

Student Borrowing Parent Borrowing

Parent Income and Savings Student Income and Savings

Relatives and Friends Grants and Scholarships

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Parents continued to be willing to stretch themselves financially to send their children to college (53% in 2012, compared with 51% in 2011 and 64% in 2010). At the same time, parents were less likely to strongly agree that they would rather borrow to pay for their child’s college education than their child not attend college at all (47% in 2012, compared with 51% in 2011 and 59% in 2010). More than three quarters of parents agreed with the relative value of a college education, though this is slightly lower than in previous years. In 2012,

77 percent of parents strongly agreed that a college education is an investment in their child’s future, compared with 83 percent in 2011 and 81 percent in 2010. A consistent two-thirds of parents strongly agreed that a degree is more important now than ever (68%). Fewer parents strongly agree (19%) that they would send their child to college for the intellectual and social experience regardless of whether their child earned more money with a college degree.

discussioN of fiNdiNgs

FIgURE 8 — PAREnTS’ ATTITUdES TOwARd COLLEgE, RATEd STROngLy AgREE, yEAR-OvER-yEAR
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Willing to Stretch Financially Rather Borrow Than Not Go 2008 2009 Investment in Future 2010 2011 2012 Degree More Important Now* Attend for Experience Despite Future Earnings*
*not asked in 2008, 2009
33% 24% 19% 51% 62% 64% 56% 59% 59% 51% 47% 80% 83% 81% 83% 77% 66% 70% 68%

51%

53%

FIgURE 9— STUdEnTS’ ATTITUdES TOwARd COLLEgE, RATEd STROngLy AgREE, yEAR-OvER-yEAR
100% 90%
84% 84% 78% 74% 74% 73% 67% 59% 50% 60% 61% 56% 53% 61% 61% 62% 90% 89%

80% 70% 60% 50% 40% 30% 20% 10% 0% Willing to Stretch Financially Rather Borrow Than Not Go 2008 2009

32%

30% 29%

Investment in Future 2010 2011 2012

Degree More Important Now*

Attend for Experience Despite Future Earnings*
*not asked in 2008, 2009

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Students’ belief in the relative value of college is consistently higher than parents’, most notably with 89 percent of students in 2012 strongly agreeing college is an investment in their future and 62 percent strongly agreeing they would rather borrow to attend college than not be able to go at all. The number of students willing to stretch themselves financially to pay for college is at its highest level in five years, and is reflected in the findings that students financed more of the cost of their education than in any previous year, contributing 30 percent of the cost from their own income, savings, and borrowing, up from roughly onefourth over the last three years.

Both parents and students continued to rate career and income benefits more strongly than idealistic beliefs as reasons for attending college, perhaps a reflection of today’s economy. Seven out of ten parents (71%) and students (70%) agreed that a college education is needed for the student’s future desired occupation. Slightly more students (73%) than parents (65%) believe that the student will earn more money with a college degree. Less than half of parents (46%) and two in five students (40%) cite fulfilling the American Dream as a reason for attending college. Students (43%) are more likely than parents (36%) to say that they are attending college because it is expected in their family.

discussioN of fiNdiNgs

FIgURE 10 — PAREnTS’ REASOnS FOR ATTEndIng COLLEgE, RATEd STROngLy AgREE, yEAR-OvER-yEAR
80% 70% 60% 50% 40% 30% 20% 10% 0% Needed for Desired Occupation Earn More Money 2008 2009 2010 Expected in Family 2011 2012 American Dream
40% 36% 71% 60% 61% 68% 70% 64% 64% 58% 66% 65% 60% 56% 46% 56% 50% 44% 37% 46%

FIgURE 11 — STUdEnTS’ REASOnS FOR ATTEndIng COLLEgE, RATEd STROngLy AgREE, yEAR-OvER-yEAR
80% 70% 60% 50% 40% 30% 20% 10% 0% Needed for Desired Occupation Earn More Money 2008 2009 2010 Expected in Family 2011 2012 American Dream
38% 32% 72% 68% 64% 73% 71% 73% 63% 75% 73%

61%

47%

49% 45% 43%

46% 45% 38% 40%

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FAMILIES TAkIng MORE MEASURES TO REdUCE THE COST OF COLLEgE
In 2009 and 2010, the study found that families — most of whom made college choices prior to the onset of the recession — dug deeper from a variety of sources to pay for college for their children, despite those costs increasing substantially year-over-year. In 2011, and again in 2012, families’ behavior and attitudes appear to reflect an increased cost-consciousness and shift toward seeking greater economic value from their college choices. In 2012, families maintained the shift toward lower-cost two-year public schools that emerged in the 2011 responses. Twenty-nine percent attend two-year public schools and 45 percent attend four-year public schools (compared with 2010’s 23% and 52% respectively). Private school enrollment has remained consistent over five years with 23 percent attending four-year private schools, and 2 percent attending two-year private schools. FIgURE 12 — CUMULATIvE ELIMInATIOn OF COLLEgES BASEd On COST, yEAR-OvER-yEAR
70% 60% 50% 40% 30% 20% 10% 0% 2012 2011 2010 2009 2008 Before Researching Before Applying After Admission After Financial Aid 43% 43% 42% 37% 37% 51% 49% 45% 48% 61% 55% 53% 53% 48% 69% 64% 63% 58% 56%

43%

More families narrowed college choices for financial reasons at some point in the college selection process. In 2012, 69 percent of families eliminated colleges based on cost, up from the previous high of 64 percent in 2011. Eliminating colleges based on cost was more pervasive in low-income families, with 75 percent doing so at some stage, including half eliminating colleges prior to researching them. Virtually all families took cost-saving measures: 97 percent in 2012 compared with 94 percent in 2011. Ninety percent took two or more cost-saving measures in 2012, up from 82 percent in 2011. | 14 |

The most common cost-saving measures include living at home (51% in 2012 compared with 44% in 2011 and 43% in 2010) or adding a roommate (55% in 2012), reducing spending by parents (50% in 2012), reducing spending by students (66% in 2012), students working more hours (50% in 2012), and families taking income tax credits or deductions (45% in 2012). The figures for those living at home are particularly striking, with this increase seen most strongly in highincome groups, at 47 percent in 2012, compared with 37 percent in 2011 and 24 percent in 2010.

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FIgURE 13 — PERCEnT OF FAMILIES FILIng THE FAFSA, By InCOME, yEAR-OvER-yEAR
100% 90% 80%
74% 80% 81% 76% 72% 74% 89% 86% 85% 86% 88% 79% 74% 65% 59% 61% 65% 82% 82% 72%

discussioN of fiNdiNgs

70% 60% 50% 40% 30% 20% 10% 0%

Total

Low-Income 2008 2009 2010

Middle-Income 2011 2012

High-Income

A large proportion of families (81%) continued to seek federal financial aid by completing the Free Application for Federal Student Aid (FAFSA). Low-income families (88%) and families where the student attends a fouryear private college (89%) were more likely to file a FAFSA than other families. Reasons for not filing the FAFSA are similar to previous years. The most common

reasons include the family didn’t need financial aid (30%) and families wouldn’t qualify for aid (27%). Thirteen percent of families say they were not aware of the FAFSA. Few families said they didn’t file due to the difficulty of completing the form, though almost onefifth of families who did file the FAFSA said they found it challenging to complete.

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FAMILIES ARE COLLECTIvELy RESPOnSIBLE FOR MEETIng THE COSTS OF THEIR COLLEgE CHOICES
This year, the How America Pays for College study explores more deeply how families make decisions about college selection and finances. FIgURE 14 — COLLEgE SELECTIOn dECISIOn MAkER
Parent mostly with some student input

FIgURE 15 — PAyIng FOR COLLEgE dECISIOn MAkER
Other

1%

1%

Parent only

Student and parent equally

6%

8%

Student only Parent only

Student mostly with some parent input

42%
Student only

33%

6%

79%

Student mostly with some parent input

3%
Parent mostly with some student input Student and parent equally

5%

16%

Only 15 percent of parents and students collaborated in the decision about which college to attend. The majority reported either the student (79%) or the parents (6%) acted as the sole decision maker when choosing a college. Seventy-seven percent of students reported that the family eliminated colleges during the selection process compared with just 60 percent of parents, a particularly notable difference given students’ role as decision maker in choosing the college. Students have more influence over the choice of college than they do over the decision about how to pay for college. On decisions about how to pay for college, 16 percent say that parents and students were equally responsible and another 8 percent say there was some shared responsibility, 42 percent indicated that parents were solely responsible, and 33 percent indicated that students were solely responsible. Parents who contributed income, savings, or borrowed funds to pay for college were more likely to say they were solely responsible for deciding how to pay (55%) while parents who contributed nothing were more likely to say that the student was solely responsible (61%). Similarly, 39 percent of students who directly | 16 |

contributed to their own education say they were solely responsible for deciding how to pay while 58 percent of those who contributed nothing say their parents were solely responsible. Decision-making about how to pay for college differs significantly by income group, with high-income parents playing a greater role than low-income parents. Sixty percent of high-income parents made the decisions about how to pay for college compared with 33 percent of low-income parents. This difference could be linked to the amount parents in these income groups are contributing to the cost of college — high-income parents’ income and savings made up, on average, 42 percent of the total amount paid for college compared with low-income parents whose income and savings made up just 20 percent. Furthermore, parents in low-income families are more likely not to have attended college themselves (64% of low-income parents did not attend college compared with 29% in high-income families). These factors may help explain why low-income parents are more likely to leave decisions about their child’s college education to the child.

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FIgURE 16 — FAMILy HAd A PLAn FOR PAyIng FOR ALL yEARS OF COLLEgE, By InCOME, yEAR-OvER-yEAR
70% 60% 50% 40% 30% 20% 10% 0%
39% 34% 24% 62% 62% 57%

discussioN of fiNdiNgs

45% 43% 36% 39% 37% 30%

for paying for college. In most families, parents and students did share the responsibility: in 2012, parent income, savings, and borrowing covered 37 percent of total college costs, and student income, savings, and borrowing paid for 30 percent of total costs. Shared responsibility in many families extends to the repayment of money borrowed by parents and students. Eighty-two percent of families say that the student and parent will be jointly responsible for money borrowed by the parent, and 39 percent of families say the student and parent will be jointly responsible for money borrowed by the student. Despite perceived shared responsibility for choosing and paying, the data also shows that parents and students have differing perceptions on a number of topics related to responsibility and decision-making. Both parents and students each believe that they themselves have more responsibility than the other party when it comes to making decisions about college. This is particularly the case as it relates to deciding how to pay for college — 46 percent of students believe that they make all of the decisions when it comes to deciding how to pay for college, whereas only 18 percent of parents feel that students hold the decision-making power. The subject of student loan repayment is another example of the differing perceptions of parents and students. Seventy-four percent of students say that they are solely responsible for the repayment of the loans taken out in their name, whereas just 41 percent of parents state that they expect their child to repay their student loans completely on their own.

2010
Total families

2011
Low Income Middle Income

2012
High Income

Another factor that related to parent involvement in decision-making is whether a family had a plan to pay for college. Thirty-nine percent of families agreed they had a plan to pay for all years of college before the student enrolled, but there are significant differences between income groups. Fifty-seven percent of highincome families said they had a plan, compared with 37 percent of middle-income and 30 percent of low-income families. Families with a plan to pay for college are less likely to borrow. Among families who did not borrow, 43 percent of families said they had a plan to pay for it while 33 percent of families who borrowed had a plan. Even among borrowing families, those who have a plan to pay the full cost of college prior to enrollment borrow significantly less than families who do not plan at all for paying for college — on average $2,892 compared with $5,551, a 48 percent difference. Deciding how to pay does not mean taking on full responsibility for paying. Three-quarters of respondents (78% of students and 73% of parents) agreed that parents and students should share responsibility

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tHe role of vArious fuNdiNg sources

The summary report presents an analysis of how the typical American family pays for college. Average amounts cited for each funding source (and detailed in tables 11a-d and 12a-d) in the discussion of findings are a composite representation created by aggregating the information reported by respondents and applying it across all families, including those who did not use the specific source. Tables 1a and 1b show the proportion of families who are users of each source, and the average dollar amounts paid toward the cost of college from those sources among those families.
Table 1a — The Role of Various Non-borrowed Funding Sources Used to Pay for College Frequency of Sources and Average Amounts Used 2012 % of Total Families Non-borrowed Sources Parent Income and Savings Parent Current Income College Savings Plan (529) Retirement Savings Withdrawal Other Parent Savings or Investments Student Income and Savings Student Current Income Student Savings Federal Work-Study Other Student Savings or Investments Grants and Scholarships Scholarships Grants Relatives or Friends 58% 52% 11% 5% 9% 50% 35% 27% 5% 7% 61% 35% 45% 16% $7,673 $7,226 $4,169 $3,702 $2,746 $2,405 $3,073 $7,700 $6,616 $6,542 $6,391 66% 58% 14% 4% 13% 50% 32% 24% 11% 8% 67% 45% 46% 19% $7,677 $6,184 $4,328 $2,946 $2,593 $1,712 $3,871 $6,396 $9,729 $4,102 $5,439 64% 57% 15% 6% 14% 45% 32% 22% 8% 3% 55% 43% 30% 16% $7,819 $6,124 $9,243 $3,430 $3,329 $2,431 $2,819 $7,958 $10,077 $8,554 $9,937 59% 55% 11% 3% 14% 42% 25% 26% 5% 2% 51% 40% 30% 17% $6,907 $5,109 $5,496 $3,791 $2,369 $1,893 $5,749 $7,175 $7,312 $5,318 $7,776 Average Amount** % of Total Families 2011 Average Amount** % of Total Families 2010 Average Amount** % of Total Families 2009 Average Amount**

Almost three-fifths of families (58%) relied on parent income and savings to pay for college in the 20112012 academic year. This is significantly lower than in the two prior years of this study — 66 percent in 2011 and 64 percent in 2010 — and even lower than the 59 percent reported in 2009. This decline appears to be entirely from a reduction in the number of families using parent income, which at 52 percent is the lowest rate in the last four years of the study. Parents also decreased the average amount used from dedicated | 18 |

college savings funds by 32 percent (from $9,729 in 2011 to $6,616 in 2012), although they increased the average amount withdrawn from retirement account savings by 59 percent (from $4,102 to $6,542). Among the families that used parent income to contribute to the cost of college in the 2011-2012 academic year, the average value of the contribution was 20 percent higher than that reported the prior year (from $6,396 in 2011 to $7,700 in 2012). return to table of contents

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As in 2011, parents in 13 percent of families borrowed funds to pay for their child’s college education from a range of sources. While many fewer parents borrow to pay for college than those who draw on savings and income, the amounts borrowed — particularly through PLUS, home equity, and “other” loans — are substantial. After a decline in the value of borrowing from these sources in 2011, average amounts of PLUS Loans ($10,464), home equity loans ($12,557) and “other” parent loans ($9,227) are back to their 2008 levels.
Table 1b — The Role of Various Borrowed Funding Sources Used to Pay for College

The average amounts borrowed in 2012 by parents from private education loans ($7,294) and charged to parent credit cards ($4,911) did not change from last year. The average value of borrowing from retirement account savings ($4,357) has increased since 2011 ($2,779) but is not as high as in 2010 ($6,901). While the proportion of families dipping into retirement account savings has remained the same since the 2011 survey, the average combined amounts used via withdrawal or borrowing has increased by 50 percent to $6,478 in 2012 from $4,315 in 2011.

tHe role of vArious fuNdiNg sources

Frequency of Sources and Average Amounts Used 2012 % of Total Families Borrowed Sources Parent Borrowing Federal PLUS Loans Private Education Loan Home Equity Loan or HELOC Parent Credit Cards Retirement Account Loan Parent Other Loans Student Borrowing Federal Student Loans Private Education Loan Student Credit Cards Student Other Loans 13% 8% 3% 2% 4% 2% 3% 36% 34% 10% 3% 3% $7,874 $8,096 $2,169 $6,011 $10,464 $7,294 $12,557 $4,911 $4,357 $9,227 13% 8% 4% 3% 3% 1% 4% 34% 30% 9% 5% 4% $6,983 $6,358 $1,357 $5,437 $6,787 $6,686 $8,676 $4,764 $2,779 $6,580 18% 7% 4% 4% 6% 3% 2% 36% 28% 13% 5% 4% $5,807 $8,584 $2,021 $9,360 $9,153 $10,977 $11,204 $4,943 $6,901 $8,529 15% 8% 5% 3% 5% 1% 3% 29% 25% 12% 5% 2% $5,327 $7,516 $2,812 $5,819 $7,664 $8,401 $8,028 $3,886 $5,471 $5,762 16% 6% 4% 3% 3% 1% 5% 39% 28% 8% 3% 8% $5,075 $7,694 $2,542 $7,922 $10,701 $6,910 $10,853 $5,822 $6,299 $9,894 Average Amount** 2011 % of Total Families Average Amount** % of Total Families 2010 Average Amount** 2009 % of Total Families Average Amount** 2008 % of Total Families Average Amount**

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The overall use of grants and scholarships declined in the 2011-2012 academic year, to 61 percent compared with 67 percent in 2010-2011. It remains the most used funding source for the second year in a row, however, even ahead of parent personal contributions, the most-used source for the first three years of this study. The decline in grant and scholarship usage is most likely attributable to a decline in use of scholarships, which plunged from a high of 45 percent in 2011 to 35 percent in 2012. Grant usage, at 45 percent, maintained the high reached in 2011. Average scholarship amounts ($7,673) and grant amounts ($7,226) remained the same in 2012 as in 2011.

Contributions from relatives and friends did not change from last year. Sixteen percent of families relied on this source of funding at an average amount of $4,169. Similar to 2011, 50 percent of students contributed towards the cost of college from their own income and savings. Fewer students participated in Federal Work-Study programs in the 2011-2012 academic year — 5 percent compared with 11 percent in 20102011 and 8 percent in the 2009-2010 academic year. Students contributed substantial amounts from their earnings in 2012, both from current income ($3,702) and from Work-Study ($2,405). The average amount contributed from student savings was similar to last year at $2,746. Almost three times as many students (36%) as parents (13%) borrowed to help pay for college in 2012. While the proportion of students who borrowed did not differ this year from the previous year, the average amounts borrowed increased. In 34 percent of families, students borrowed an average of $7,874 through the federal student loan program, up 13 percent from the average amount of $6,983 in 2011. Ten percent of students borrowed an average of $8,096 through private education loans, similar to the amount borrowed in 2010, after a dip to $6,358 in 2011. The average amount charged to student credit cards, $2,169, is also back up to a similar amount charged in 2010, after a decline to $1,357 in 2011.

tHe role of vArious fuNdiNg sources

For the first time, the study asked respondents to identify the type of scholarship(s) they received: • 73% reported receiving a scholarship directly from the college, at an average amount of $5,645. • 27% reported receiving a scholarship from a community group or nonprofit organization, at an average amount of $568. • 26% reported receiving a scholarship awarded by their state government, at an average amount of $592.

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studeNts wHo borrow PrivAte educAtioN loANs

Private education loans continue to fund a small but important share of college costs. In academic year 2011-2012, private education loans paid 4 percent of the cost of undergraduate education. Yet, nine out of 10 students did not use private education loans. For nearly all who did, private education loans supplemented federal borrowing to help families pay for the higher cost college of their choice. FIgURE 17 — STUdEnT LOAn BORROwIng By LOAn TyPE
Both federal & private loans

9%

Private only

1%

Student loans
Federal only

25%

35%

No student loan in 2011-2012

Within college type, families who use private education loans spend comparable amounts for college as families whose students borrow only federal loans. However, families with students who borrow any education loan paid significantly more for college than families with students who did not borrow. • For those attending four-year private schools, private education loan borrowers spent $37,726, compared to the $36,551 spent by those who borrowed only federal loans, and $30,801 spent by those who did not borrow student loans. • Similarly, at four-year public schools, private education loan borrowers spent $22,943, compared to the $22,418 spent by those who borrowed only federal loans, and $18,760 spent by those who did not borrow any student loans. Of the 10 percent of students who used private education loans in academic year 2011-2012, half borrowed less than $5,000. Most (57%) of the students who borrowed more than $5,000 in private education loans attended a four-year private college. Of students attending four-year private colleges, 4 percent borrowed less than $5,000 in private loans and 12 percent borrowed more than $5,000, while 84 percent did not use private loans. Of students attending four-year public colleges, 7 percent borrowed less than $5,000 in private loans and 3 percent borrowed more than $5,000, while 89 percent did not use private loans.

65%

Last year, 65 percent of families paid for college without a student loan – federal or private. Twentyfive percent of all students borrowed only federal loans. Nine percent of students used both federal and private education loans and 1 percent borrowed a private education loan but no federal loan. The high usage of federal loans among students with private education loans reflects their nearly universal use of the FAFSA—98 percent of private education loan borrowers completed the FAFSA last year. Students attending four-year colleges are more likely than those at two-year schools to use private education loans. Less than 5 percent of students at two-year schools used private education loans, compared to 11 percent of students at four-year public schools and 16 percent of students at four-year private colleges. Private education loans appear to help families pay for higher-cost colleges. Families who used private education loans spent $29,940 on average for college in 2011-2012, compared to $19,650 by those who did not use private loans. | 21 |

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FIgURE 18 — STUdEnT PRIvATE EdUCATIOn LOAn BORROwIng By SCHOOL TyPE

studeNts wHo borrow PrivAte educAtioN loANs

Four-Year Colleges Public Private

No Private Education Loan

Borrowed < $5,000 in Private Loans

Borrowed > $5,000 in Private Loans

Average Amount Spent on College

89% 84%

7% 4%

3% 12%

$20,518 $34,532

In meeting higher college costs, families in which students have private education loans are more likely to find ways to make the college of their choice more affordable. They are more likely to agree that they would rather borrow to attend college than not go at all (91% compared with 82%). Yet, they are conscious about finding alternate sources of funding and ways to make college more affordable. • Ninety-eight percent of private education loan borrowers completed the FAFSA last year, compared to 81 percent overall. • Seventy-eight percent of private education loan borrowers eliminated colleges due to cost at some point during the school selection process, compared to 69 percent overall. • To make college more affordable, private education loan borrowers increased their work hours or earnings more than other students (63% compared with 50%).

• Private education loan borrowers reduced personal spending by cutting back on vacations and entertainment at a higher rate than other students (82% compared with 66%). • Private student loan borrowers were more likely to file for education tax credits or student loan interest tax deductions (65% compared with 45%). Private education loan borrowers are equally likely to own credit cards as other students but less likely to carry a balance. Among students who have both a private education loan and a credit card, 46 percent reported a zero balance on the card, compared to 33 percent overall. These students reported a lower average balance of $480 compared to the overall average balance reported of $755.

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college studeNts ANd credit cArds

How much do families rely on credit cards to pay for college? How many students have credit cards? What is the effect of the Card Act of 2009, which restricted the marketing and issuing of credit cards to college students? This year’s How America Pays for College provides considerable insight into these questions.

CREdIT CARdS And PAyIng FOR COLLEgE
With five years of research into how families meet the costs of college, How America Pays for College has consistently shown that families pay for very little of them with credit cards. • Student credit cards paid less than one-half of one percent of the typical family’s college costs. Parents’ credit cards paid only one percent. • This doesn’t mean that credit cards were not used at all to pay the college bills. A small proportion of students (3%) used credit cards to pay an average of $2,169 of their college costs. These findings have remained relatively consistent over the five years of this study, even when families stretched to meet higher costs two years ago. • A similarly small proportion (4%) of parents use credit cards to pay college bills. When these parents do use credit cards, the amount can be significant, an average of $4,911 last year.

STUdEnTS And CREdIT CARdS
FIgURE 19 — CREdIT CARd USAgE By gRAdE LEvEL, yEAR-OvER-yEAR
70% 60% 50% 40% 30% 20% 10% 0% Total Freshman Sophomore 2010 2011 Junior 2012 Senior 5th year or higher
23% 20% 21% 42% 40% 35% 28% 41% 43% 49% 45% 38% 57% 56% 60% 61% 66%

• Thirty-five percent of students owned a credit card this year, down from 42 percent in 2010, the first year this study asked about credit cards. • Over three-quarters of students with credit cards have them in their own name, a similar percent as last year. • Freshmen are least likely to carry a credit card, with 21 percent of freshmen owning a credit card in 2012, compared with 60 percent of seniors. The percent of freshmen having credit cards has been constant over the last three years.

While few students use credit cards to pay for college, many more do use credit cards for everyday purchases. However, the percent of students with credit cards has dropped two years in a row.

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• The largest drop in ownership was among sophomores and, to a somewhat lesser extent, juniors. In the prior two years, sophomores doubled the freshmen rate of credit card ownership. In 2012, they adopted them at a much slower pace with only 28 percent having a card in 2012. Junior year students owning credit cards dropped to 38 percent ownership this year, down from almost half of all juniors in 2010.

• Credit card ownership is much higher among students from high-income families (53%, compared with just 29% and 31% respectively among low- and middle-income students). While ownership among students from high- and low-income families was the same as the prior year, possession of credit cards among students from middle-income families dropped significantly in one year, from 42% in 2011 to 31% this year.

college studeNts ANd credit cArds

STUdEnT CREdIT CARdS And OUTSTAndIng BALAnCES
FIgURE 20 — AvERAgE OUTSTAndIng CREdIT CARd BALAnCES
$2,001-$4,000

5% 5%

> $4,000 $1,001-$2,000

3%

• The average outstanding credit card balance reported was $755. Because of the high proportion of students with low balances, the median outstanding balance was $196 (that is, the mid-point where half had less than $196 on their credit card and half had more). • The average outstanding credit card balance among seniors is $515, compared with $642 among freshmen. However, the median debt among freshmen is $97 while among juniors and seniors the median is $198 and $167 respectively. Despite greater ownership rates, high-income students have lower credit card balances on average — $521 compared with $755 in the general student population. This is probably due to parents contributing more toward the payment of credit card debt in high-income families — 40 percent of parents pay at least some of their students’ monthly credit card bill, compared with 12 percent of low-income parents and 18 percent of middle-income parents.

$501-$1,000

11%

Zero balance

33%

$1-$500

42%

Most students keep the balances on their credit cards low. • One-third of student credit cards have zero balances. Another 41 percent of families report student card balances of less than $500. Only 3 percent carry a balance greater than $4,000.

STUdEnTS And dEBIT CARdS
Compared with credit cards, debit card ownership is much more prevalent among college students. More than twice as many students (80%) carry debit cards than carry credit cards. Most students who own a credit card also own a debit card (91%), and 32 percent of students own both a debit and credit card. Seventeen percent of college students carry no cards. Unlike the credit card trend, the rate of debit card ownership is equivalent to 2011. In 2011, 82 percent of students reported carrying debit cards, and 90 percent of credit card holders also carried a debit card.

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dAtA tAbles

The following section lists the questions as worded in the 2012 survey and the summary responses by various population segments. • Respondent base is all parents and college students unless otherwise noted. • N is the weighted sample size of the segment within the respondent base. Q. Of the total [named dollar amount] cost of attendance, how much money did you (student)/your child) use to pay for college this year from each of the following sources? Your best estimate is fine. a. Grants (Federal, state or school based) b. Scholarships (received from the school or outside organizations or businesses or state programs)
Table 2 — Average Grant & Scholarship Amounts N Grants Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic Borrowing Status Borrowed Did Not Borrow Grade Level Freshman Sophomore Junior Senior 5th Year + Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College
*Small sample size **Among those who used each source

Table 2 — Average Grant & Scholarship Amounts (cont.) % of Total Families 45% 64% 44% 21% 44% 65% 48% 51% 40% 42% 45% 51% 46% 35% 41% 59% 40% Average Amount** $7,226 $7,088 $7,046 $8,700 Race/Ethnicity $7,261 $7,000 $7,478 Borrowing Status 705 896 447 499 317 248 64* 720 364 466 $7,624 $6,834 Grade Level $6,598 $8,176 $7,433 $6,293 $6,230 Type of School $6,491 $10,853 $4,678 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College 720 364 466 35% 55% 16% $5,785 $12,274 $2,109 Freshman Sophomore Junior Senior 5th Year + 447 499 317 248 64 37% 28% 41% 36% 28% $6,533 $8,160 $8,250 $7,978 $9,538 Borrowed Did Not Borrow 705 896 40% 30% $7,301 $8,050 Scholarships Income 475 806 319 <$35k $35-$100k $100k+ White Black Hispanic 475 806 319 1147 228 259 34% 36% 33% 38% 26% 27% $6,582 $7,428 $9,981 $7,722 $8,397 $6,328 N 1601 % of Total Families 35% Average Amount** $7,673

1601

1147 228 259

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Q. You told us that you/your child received [$ amount] in scholarships to pay for college this year. How much of this amount was: a. Awarded by the state/government b. Awarded by the college c. Awarded by a community or nonprofit organization?

Q. Of the total [named dollar amount] cost of attendance, how much money did you (student)/ your child use to pay for college this year from each of the following sources? Your best estimate is fine. a. Federal Work-study b. Your/your child’s savings c. Your/your child’s current income d. Other student savings or investments
Table 4 — Use of Student Income & Savings

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Table 3 — Scholarship Source N 558 Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic Borrowing Status Borrowed Did Not Borrow Grade Level Freshman Sophomore Junior Senior 5th Year + Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/ Community College 201 246 87* 27% 27% 18% 71% 83% 52% 34% 20% 24% 171 138 132 90* 17* 18% 29% 30% 33% 59% 79% 81% 84% 33% 22% 20% 29% 281 277 25% 27% 80% 66% 28% 25% 429 69* 81* 24% 42% 18% 75% 59% 61% 26% 32% 25% 164 287 108 26% 27% 25% 72% 73% 75% 29% 26% 24% % State 26% % College 73% % Nonprofit 27%

N Student Personal Contributions Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic Borrowing Status Borrowed Did Not Borrow Grade Level Freshman Sophomore Junior Senior 5th Year + Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College 720 364 466 447 499 317 248 64 705 896 1147 228 259 475 806 319 1601

% of Total Families 50% 59% 47% 45% 53% 43% 49% 51% 50% 48% 48% 52% 54% 60% 52% 46% 52%

Base: Parents and college students in families that reported using scholarships *Small sample size

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT

SALLIE MAE | IPSOS

7:

Q. Of the total [named dollar amount] cost of attendance, how much money did you (parent)/your parents use to pay for college this year from each of the following sources? Your best estimate is fine. a. Parent current income b. College savings fund, such as a 529 plan c. Retirement Savings withdrawal (including 401k, Roth IRA, or other IRA) d. Other parent savings or investments
Table 5 — Use of Parent Income & Savings N Parent Personal Contributions Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic Borrowing Status Borrowed Did Not Borrow Grade Level Freshman Sophomore Junior Senior 5th Year + Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College 720 364 466 62% 64% 47% 447 499 317 248 64 60% 60% 60% 50% 55% 705 896 53% 63% 1147 228 259 60% 51% 52% 475 806 319 44% 61% 73% 1601 % of Total Families 58%

Q. When making payments to the college, was a monthly payment plan or other installment payment plan (rather than pay the full amount due at the beginning of each term) used?

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Table 6 — Use of Payment Plan N Parent Personal Contributions Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic Borrowing Status Borrowed Did Not Borrow Grade Level Freshman Sophomore Junior Senior 5th Year + Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College 720 364 466 20% 32% 17% 447 499 317 248 64 22% 23% 27% 20% 14% 705 896 31% 17% 1147 228 259 20% 30% 30% 475 806 319 20% 27% 16% 1601 % Yes 23%

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT

SALLIE MAE | IPSOS

7:

Q. Of the total [named dollar amount] cost of attendance, how much of your/your child’s college funding came from relatives or friends (money that does not have to be repaid)? Your best estimate is fine.
Table 7 — Use of Funds from Relatives & Friends N Relative & Friend Contributions Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic Borrowing Status Borrowed Did Not Borrow Grade Level Freshman Sophomore Junior Senior 5th Year + Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College 720 364 466 18% 14% 21% 447 499 317 248 64 20% 18% 16% 15% 21% 705 896 13% 21% 1147 228 259 17% 25% 17% 475 806 319 23% 17% 13% 1601 % of Total Families 18%

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT

SALLIE MAE | IPSOS

7:

Q. Were any types of loans, or other types of credit or borrowed money used to pay for college this year? Some examples may include student or private loans, home equity, or credit cards.
Table 8 — Who Contributed Borrowed Funds N Total Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic Grade Level Freshman Sophomore Junior Senior 5th Year + Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College Region Northeast Midwest South West 240 376 527 436 50% 43% 45% 40% 120 163 235 174 720 364 466 48% 63% 22% 343 228 104 444 487 315 248 64 40% 37% 55% 55% 45% 178 180 172 137 28 1129 224 259 43% 51% 40% 483 114 104 475 806 319 43% 47% 39% 203 378 124 1601 Family Borrowed % Yes 44% N 704

Q. Who borrowed the money used to pay for college this year?

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Student Only %* 72% 86% 71% 55% 77% 60% 73% 74% 67% 79% 64% 94% 74% 68% 75% 70% 81% 71% 67%

Parent Only %* 22% 10% 26% 28% 17% 32% 24% 24% 26% 14% 26% 6% 20% 25% 18% 24% 16% 22% 25%

Both %* 6% 4% 4% 16% 6% 8% 3% 3% 6% 7% 10% 0% 6% 7% 7% 6% 3% 7% 8%

Total Student 78% 90% 75% 71% 83% 68% 76% 77% 73% 86% 74% 94% 80% 75% 82% 76% 84% 78% 75%

Total Parent 28% 14% 30% 44% 23% 40% 27% 27% 32% 21% 36% 6% 26% 32% 25% 30% 19% 29% 33%

*Categories are mutually exclusive. All are percent of families that borrowed.

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT

SALLIE MAE | IPSOS

7:

Q. Of the total [named dollar amount] cost of attendance, how much money did you (parent)/ your parents use to pay for college this year from each of the following borrowed sources? Your best estimate is fine. a. Federal Parent PLUS Loan b. Private education loans in your/your parent’s name, not including loans where you/your parent are only a cosigner c. Home equity loan or line of credit d. Credit cards in your/your parent’s name e. Retirement account loan (including 401k, Roth IRA, or other IRA) f. Other loans in your/your parent’s name
Table 9 — Use of Parent Borrowed Funds N Parent Borrowing Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic Grade Level Freshman Sophomore Junior Senior Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College
*Percent of total families naming amount >$0

Q. Of the total [named dollar amount] cost of attendance, how much money did you (student)/ your child use to pay for college this year from each of the following borrowed sources? Your best estimate is fine. a. Federal student loans, such as Stafford or Perkins loans, or the Direct Loan Program b. Private education loans in your/your child’s name, including loans where your parent/ you or anyone else is a cosigner c. Credit cards in your/your child’s name d. Other loans in your/your child’s name

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Table 10 — Use of Student Borrowed Funds % of Total Families * 13% 6% 14% 18% Race/Ethnicity 1147 228 259 447 499 317 248 720 364 466 10% 20% 11% Grade Level 11% 12% 12% 20% Type of School 13% 20% 6% 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College
*Percent of total families naming amount >$0

N Student Borrowing Income <$35k $35-$100k $100k+ White Black Hispanic Freshman Sophomore Junior Senior 1601 475 806 319 1147 228 259 447 499 317 248 720 364 466

% of Total Families * 36% 39% 36% 29% 37% 35% 31% 31% 28% 48% 41% 40% 47% 19%

1601 475 806 319

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT
Table 11a — Composite of College Funding Sources Average Value Contributed from Each Source, by Income Level

SALLIE MAE | IPSOS

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Income Total Borrowed Parents Federal Parent PLUS Loan Private education loans Home equity loan or line of credit Credit cards Retirement account loan (including 401k, Roth IRA, or other IRA) Other loans Student Federal student loans, such as Stafford or Perkins loans Private education loans Student credit cards Student other loans Non-Borrowed Parents Parent current income College savings fund, such as a 529 plan Other parent savings or investments Retirement savings withdrawal (including 401k, Roth IRA, or other IRA) Student Student current income Student savings Federal Work-study Other student savings or investments Other Scholarships (received from the school or outside organizations or businesses) Grants (Federal, state or school based) Relatives or friends (money that doesn't have to be repaid) Total Paid Table 11b — Composite of College Funding Sources Average Value Contributed from Each Source, by Race/Ethnicity Race/Ethnicity Total Borrowed Parents Federal Parent PLUS Loan Private education loans Home equity loan or line of credit Credit cards Retirement account loan (including 401k, Roth IRA, or other IRA) Other loans Student Federal student loans, such as Stafford or Perkins loans Private education loans Student credit cards Student other loans Non-Borrowed Parents Parent current income College savings fund, such as a 529 plan Other parent savings or investments Retirement savings withdrawal (including 401k, Roth IRA, or other IRA) Student Student current income Student savings Federal Work-study Other student savings or investments Other Scholarships (received from the school or outside organizations or businesses) Grants (Federal, state or school based) Relatives or friends (money that doesn't have to be repaid) Total Paid $816 $223 $229 $228 $81 $255 $2,648 $794 $71 $206 $4,025 $820 $682 $429 $1,317 $788 $176 $275 $2,753 $3,324 $764 $20,902 White $687 $178 $76 $198 $18 $201 $2,653 $892 $58 $214 $3,940 $912 $581 $341 $1,425 $730 $136 $309 $2,998 $3,199 $851 $20,595 Black $1,642 $397 $304 $169 $50 $440 $2,776 $486 $86 $94 $3,366 $460 $504 $217 $731 $719 $301 $300 $2,582 $4,762 $557 $20,943 Hispanic $634 $81 $51 $150 $1 $199 $2,414 $734 $193 $153 $4,077 $303 $449 $929 $1,146 $897 $216 $380 $2,021 $3,756 $612 $19,395 $816 $223 $229 $228 $81 $255 $2,648 $794 $71 $206 $4,025 $820 $682 $429 $1,317 $788 $176 $275 $2,753 $3,324 $764 $20,902 <$35k $370 $21 $3 $84 $127 $161 $2,787 $708 $129 $285 $2,802 $290 $339 $406 $1,286 $1,060 $264 $366 $2,326 $4,479 $869 $19,159 $35k <$100k $978 $267 $429 $212 $38 $238 $2,689 $789 $37 $219 $3,401 $852 $794 $265 $1,270 $709 $144 $161 $2,721 $3,173 $681 $20,065 $100k+

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$1,073 $413 $64 $482 $120 $439 $2,339 $934 $70 $56 $7,424 $1,534 $911 $875 $1,480 $580 $125 $430 $3,470 $1,982 $818 $25,617

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT
Table 11c — Composite of College Funding Sources Average Value Contributed from Each Source, by School Type

SALLIE MAE | IPSOS

7:

School Type Total Borrowed Parents Federal Parent PLUS Loan Private education loans Home equity loan or line of credit Credit cards Retirement account loan (including 401k, Roth IRA, or other IRA) Other loans Student Federal student loans, such as Stafford or Perkins loans Private education loans Student credit cards Student other loans Non-Borrowed Parents Parent current income College savings fund, such as a 529 plan Other parent savings or investments Retirement savings withdrawal (including 401k, Roth IRA, or other IRA) Student Student current income Student savings Federal Work-study Other student savings or investments Other Scholarships (received from the school or outside organizations or businesses) Grants (Federal, state or school based) Relatives or friends (money that doesn't have to be repaid) Total Paid Table 11d — Composite of College Funding Sources Average Value Contributed from Each Source, by Family Borrowing Status Family Borrowing Status Total Borrowed Parents Federal Parent PLUS Loan Private education loans Home equity loan or line of credit Credit cards Retirement account loan (including 401k, Roth IRA, or other IRA) Other loans Student Federal student loans, such as Stafford or Perkins loans Private education loans Student credit cards Student other loans Non-Borrowed Parents Parent current income College savings fund, such as a 529 plan Other parent savings or investments Retirement savings withdrawal (including 401k, Roth IRA, or other IRA) Student Student current income Student savings Federal Work-study Other student savings or investments Other Scholarships (received from the school or outside organizations or businesses) Grants (Federal, state or school based) Relatives or friends (money that doesn't have to be repaid) Total Paid $816 $223 $229 $228 $81 $255 $2,648 $794 $71 $206 $4,025 $820 $682 $429 $1,317 $788 $176 $275 $2,753 $3,324 $764 $20,902 Borrowed $1,785 $477 $491 $488 $164 $548 $5,841 $1,748 $152 $450 $3,601 $410 $562 $542 $1,333 $594 $197 $224 $2,909 $3,846 $448 $26,810 Did Not Borrow n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a $4,376 $1,160 $781 $335 $1,303 $948 $158 $317 $2,624 $2,891 $1,027 $15,920 $816 $223 $229 $228 $81 $255 $2,648 $794 $71 $206 $4,025 $820 $682 $429 $1,317 $788 $176 $275 $2,753 $3,324 $764 $20,902 2-Year Public $107 $102 $22 $111 $20 $29 $947 $311 $48 $197 $1,608 $264 $316 $290 $1,293 $885 $68 $171 $405 $2,039 $820 $10,053 4-Year Public $672 $168 $357 $129 $140 $237 $2,970 $580 $79 $188 $4,817 $889 $851 $609 $1,279 $763 $185 $264 $2,061 $2,607 $673 $20,518 4-Year Private $1,911 $321 $85 $590 $56 $431 $3,804 $1,769 $91 $241 $5,541 $1,445 $897 $284 $1,502 $775 $299 $386 $6,788 $6,395 $921 $34,532

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT
Table 12a — Composite of College Funding Sources Average Percent of Total Cost of Attendance Met by Each Source, by Income Level

SALLIE MAE | IPSOS

7:

Income Total Borrowed Parents Federal Parent PLUS Loan Private education loans Home equity loan or line of credit Credit cards Retirement account loan (including 401k, Roth IRA, or other IRA) Other loans Student Federal student loans, such as Stafford or Perkins loans Private education loans Student credit cards Student other loans Non-Borrowed Parents Parent current income College savings fund, such as a 529 plan Other parent savings or investments Retirement savings withdrawal (including 401k, Roth IRA, or other IRA) Student Student current income Student savings Federal Work-study Other student savings or investments Other Scholarships (received from the school or outside organizations or businesses) Grants (Federal, state or school based) Relatives or friends (money that doesn't have to be repaid) 4% 1% 1% 1% 0% 1% 13% 4% 0% 1% 19% 4% 3% 2% 6% 4% 1% 1% 13% 16% 4% <$35k 2% 0% 0% 0% 1% 1% 15% 4% 1% 1% 15% 2% 2% 2% 7% 6% 1% 2% 12% 23% 5% $35k <$100k 5% 1% 2% 1% 0% 1% 13% 4% 0% 1% 17% 4% 4% 1% 6% 4% 1% 1% 14% 16% 3% $100k+

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4% 2% 0% 2% 0% 2% 9% 4% 0% 0% 29% 6% 4% 3% 6% 2% 0% 2% 14% 8% 3%

Table 12b — Composite of College Funding Sources Average Percent of Total Cost of Attendance Met by Each Source, by Race/Ethnicity Race/Ethnicity Total Borrowed Parents Federal Parent PLUS Loan Private education loans Home equity loan or line of credit Credit cards Retirement account loan (including 401k, Roth IRA, or other IRA) Other loans Student Federal student loans, such as Stafford or Perkins loans Private education loans Student credit cards Student other loans Non-Borrowed Parents Parent current income College savings fund, such as a 529 plan Other parent savings or investments Retirement savings withdrawal (including 401k, Roth IRA, or other IRA) Student Student current income Student savings Federal Work-study Other student savings or investments Other Scholarships (received from the school or outside organizations or businesses) Grants (Federal, state or school based) Relatives or friends (money that doesn't have to be repaid) 4% 1% 1% 1% 0% 1% 13% 4% 0% 1% 19% 4% 3% 2% 6% 4% 1% 1% 13% 16% 4% White 3% 1% 0% 1% 0% 1% 13% 4% 0% 1% 19% 4% 3% 2% 7% 4% 1% 2% 15% 16% 4% Black 8% 2% 1% 1% 0% 2% 13% 2% 0% 0% 16% 2% 2% 1% 3% 3% 1% 1% 12% 23% 3% Hispanic 3% 0% 0% 1% 0% 1% 12% 4% 1% 1% 21% 2% 2% 5% 6% 5% 1% 2% 10% 19% 3%

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT
Table 12c — Composite of College Funding Sources Average Percent of Total Cost of Attendance Met by Each Source, by School Type

SALLIE MAE | IPSOS

7:

School Type Total Borrowed Parents Federal Parent PLUS Loan Private education loans Home equity loan or line of credit Credit cards Retirement account loan (including 401k, Roth IRA, or other IRA) Other loans Student Federal student loans, such as Stafford or Perkins loans Private education loans Student credit cards Student other loans Non-Borrowed Parents Parent current income College savings fund, such as a 529 plan Other parent savings or investments Retirement savings withdrawal (including 401k, Roth IRA, or other IRA) Student Student current income Student savings Federal Work-study Other student savings or investments Other Scholarships (received from the school or outside organizations or businesses) Grants (Federal, state or school based) Relatives or friends (money that doesn't have to be repaid) 4% 1% 1% 1% 0% 1% 13% 4% 0% 1% 19% 4% 3% 2% 6% 4% 1% 1% 13% 16% 4% 2-Year Public 1% 1% 0% 1% 0% 0% 9% 3% 0% 2% 16% 3% 3% 3% 13% 9% 1% 2% 4% 20% 8% 4-Year Public 3% 1% 2% 1% 1% 1% 14% 3% 0% 1% 23% 4% 4% 3% 6% 4% 1% 1% 10% 13% 3% 4-Year Private 6% 1% 0% 2% 0% 1% 11% 5% 0% 1% 16% 4% 3% 1% 4% 2% 1% 1% 20% 19% 3%

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Table 12d — Composite of College Funding Sources Average Percent of Total Cost of Attendance Met by Each Source, by Family Borrowing Status Family Borrowing Status Total Borrowed Parents Federal Parent PLUS Loan Private education loans Home equity loan or line of credit Credit cards Retirement account loan (including 401k, Roth IRA, or other IRA) Other loans Student Federal student loans, such as Stafford or Perkins loans Private education loans Student credit cards Student other loans Non-Borrowed Parents Parent current income College savings fund, such as a 529 plan Other parent savings or investments Retirement savings withdrawal (including 401k, Roth IRA, or other IRA) Student Student current income Student savings Federal Work-study Other student savings or investments Other Scholarships (received from the school or outside organizations or businesses) Grants (Federal, state or school based) Relatives or friends (money that doesn't have to be repaid) 4% 1% 1% 1% 0% 1% 13% 4% 0% 1% 19% 4% 3% 2% 6% 4% 1% 1% 13% 16% 4% Borrowed 7% 2% 2% 2% 1% 2% 22% 7% 1% 2% 13% 2% 2% 2% 5% 2% 1% 1% 11% 14% 2% Did Not Borrow n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 27% 7% 5% 2% 8% 6% 1% 2% 16% 18% 6%

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT

SALLIE MAE | IPSOS

7:

Q. For the 2011-2012 academic year did you complete the FAFSA?
Table 13 — Completed FAFSA Application N Total Students Parents Income <$35k $35k - <$100k $100k+ Race/Ethnicity White Black Hispanic Grade Level Freshman Sophomore Junior Senior 5th Year + Region Northeast Midwest South West School type 4-year public 4-year private 2-year public 2-year private 720 364 466 26 82% 89% 74% 95% 18% 11% 26% 5% 1% 0% 0% 0% 338 375 484 390 84% 81% 80% 81% 16% 19% 19% 19% 0% 0% 1% 0% 447 499 317 248 64 83% 78% 88% 81% 71% 17% 22% 12% 17% 29% 0% 0% 0% 2% 0% 1147 228 259 82% 82% 79% 18% 15% 21% 0% 2% 0% 475 806 319 88% 82% 72% 12% 18% 28% 0% 1% 0% 1601 817 784 % Yes 81% 81% 82% % No 18% 19% 18% % Don't Know 1% 0% 1%

Q. On a scale of 1-5, with 1 being extremely easy and 5 being extremely challenging, how easy was it to complete the FAFSA form?
Table 14 — FAFSA Application Ease of Use N % 1s Extremely Easy 23% 21% 25% 27% 20% 25% 20% 37% 23% 18% 28% 22% 20% 28% % 2s % 3s % 4s % 5s Extremely Challenging 4% 3% 5% 5% 4% 4% 4% 6% 4% 4% 3% 4% 3% 8%

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Total Students Parents Income <$35k $35k - <$100k $100k+ Race/Ethnicity White Black Hispanic Grade Level Freshman Sophomore Junior Senior 5th Year +

1303 663 640 416 657 229 937 188 204 372 387 278 202 45

26% 31% 21% 26% 28% 21% 28% 23% 24% 27% 23% 26% 31% 38%

32% 32% 33% 31% 32% 36% 33% 23% 33% 37% 30% 36% 27% 12%

14% 12% 15% 10% 16% 13% 14% 9% 16% 13% 14% 12% 18% 15%

Base: Parents and college students who completed the FAFSA

Q. Why didn’t you complete the FAFSA?
Table 15 — Reasons Did Not Complete FAFSA Application N % Family Doesn't Need Aid 30% 25% 37% % Family Won't Qualify 27% 19% 36% % Wasn't Aware of FAFSA 13% 17% 10% % Other Sources Paying 9% 14% 4% % Other Reason 19% 23% 14%

Total Students Parents

292 154 138

Reasons reported received at least 3% of total Base: Parents of college students and college students who did not complete a FAFSA application

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT

SALLIE MAE | IPSOS

7:

Q. For the 2011-2012 school year, what is the total cost of attendance per year, including tuition, room and board, and any other school costs, for enrolled students at your child’s/your school, without financial aid? Your best estimate is fine.
Table 16 — Total Cost of Attendance N Total Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College 2-Year Private College Borrowing Status Borrowed Did Not Borrow Enrollment Status Full time Part time 1324 258 $19,530 $9,409 705 896 $22,489 $13,848 720 364 466 26 $16,431 $32,303 $7,900 $20,263 1147 228 259 $17,976 $16,531 $15,953 475 806 319 $15,420 $17,637 $21,931 1601 Mean $17,843

Q. Can you tell me the name of the school your child/ you attended in the 2011-2012 school year? And which campus is that? (Match to school type.)

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Table 17 — Enrollment by Type of School N Total Income <$35k $35k - <$100k $100k+ Race/Ethnicity White Black Hispanic Region Northeast Midwest South West Grade Level Freshman Sophomore Junior Senior 5th Year + Borrowing Status Borrowed Did Not Borrow 705 896 49% 42% 32% 15% 15% 40% 2% 1% 447 499 317 248 64 41% 32% 53% 64% 70% 19% 24% 28% 20% 30% 39% 41% 15% 14% 0% 1% 2% 1% 1% 0% 338 375 484 390 33% 44% 51% 49% 42% 23% 18% 13% 17% 32% 29% 37% 5% 0% 1% 1% 1147 228 259 47% 36% 37% 21% 30% 19% 29% 31% 40% 1% 2% 3% 475 806 319 45% 43% 50% 18% 25% 24% 33% 29% 23% 2% 1% 1% 1601 4-Year Public 45% 4-Year Private 23% 2-Year Public 29% 2-Year Private 2%

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT

SALLIE MAE | IPSOS

7:

Q. In which state is student attending college?
Table 18 — Enrollment by Home State N Total Income <$35k $35k - <$100k $100k+ Race/Ethnicity White Black Hispanic Region Northeast Midwest South West School Type 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College Borrowing Status Borrowed Did Not Borrow 705 896 71% 85% 29% 15% 720 364 466 87% 53% 90% 13% 47% 10% 338 375 484 390 61% 80% 84% 90% 39% 20% 16% 10% 1147 228 259 81% 66% 82% 19% 34% 18% 475 806 319 82% 79% 75% 18% 21% 25% 1601 In-State 79% Out-of-State 21%

Q. What general subject area is your child/are you currently studying/majoring in?
Table 19 — Student Course of Study N % Major % of Major with Student Loan Borrowing 36% % of Major with Any Family Borrowing 42%

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Professional (Education, Law, Medicine, Healthcare, Nursing, Veterinary Medicine) Math/Science (Biology, Chemistry, Physics, Agricultural Sciences, Computer Science, Mechanical) Social Sciences (Psychology, Anthropology, Economics, Geography, Sociology, Political Science & Government, International Relations, Philosophy) Business (Accounting, Marketing, Finance, Management, International Business) Liberal Arts (English, Communications, Advertising, Journalism, Foreign Languages, Linguistics, History, Sociology) Visual and Performing Arts (Art, Graphic Design, Fashion Design, Film, Radio, Television, Photography, Music, Performing Arts) Engineering, Electrical Engineering, Environmental Science, Mathematics Vocational (Culinary Arts, Construction Trades, Mechanical Technicians, Computer Technicians) Undecided Other
*Small sample size

378

24%

262

16%

36%

42%

248

16%

30%

46%

197

12%

34%

49%

160

10%

42%

49%

116

7%

53%

56%

110

7%

29%

44%

67*

4%

20%

29%

35* 33*

2% 2%

24% 24%

29% 28%

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HOw AMERICA PAyS FOR COLLEgE 2012 | SUMMARy REPORT

SALLIE MAE | IPSOS

7:

Q. Please let me know whether or not you eliminated any schools based on cost at each of the following steps in the college application process: a. Before deciding which colleges to research b. Before deciding which colleges to apply to c. After finding out which colleges your child was/you were admitted to but before looking at financial aid packages d. After looking at the financial aid packages
Table 20 — Elimination of Colleges Based on Cost % Saying Yes at Each Point N Total Parents Students Income <$35k $35-<$100k $100k+ School Type 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College Race/Ethnicity White Black Hispanic Borrowing Status Borrowed Did Not Borrow 705 896 43% 44% 43% 46% 39% 39% 54% 46% 1147 228 259 42% 47% 44% 43% 47% 45% 37% 45% 46% 48% 58% 48% 720 364 466 44% 37% 49% 45% 38% 48% 36% 38% 43% 45% 56% 52% 475 806 319 50% 43% 35% 47% 45% 39% 42% 42% 28% 56% 49% 43% 1601 784 817 Before Researching 43% 38% 49% Before Applying 44% 37% 52% After Admission 39% 34% 44% After Financial Aid 50% 43% 56%

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Q. For the 2011-2012 academic year, did you/your child take any of the following actions to make college more affordable? How about…? a. Military benefits, ROTC or National Guard i. Student reducing personal spending b. Choosing or transferring to a less j. Accelerated coursework so you/your child could earn a expensive school degree in fewer semesters c. Living at home k. Changed majors to pursue field of study that is more d. Student got roommate to save on rent marketable e. Enrolling part-time l. Filing for education tax credits or student loan interest f. Parent increasing work hours or earnings tax deductions g. Student increasing work hours or earnings m. Making payments on student loans, rather than h. Parent reducing personal spending postponing them to reduce total loan costs
Table 21 — More Affordable Actions % Taking N Military Less Expensive 27% 30% 29% 19% 25% 35% 31% 22% 17% 44% Living At Home 51% 50% 53% 47% 50% 55% 69% 38% 40% 77% Add Roommate 55% 57% 56% 50% 55% 47% 52% 58% 46% 55% Parent Work More 24% 21% 26% 20% 20% 33% 28% 21% 28% 23% Student Work More 50% 53% 51% 42% 52% 43% 53% 51% 52% 50% Parent Reduced Spending 50% 44% 54% 46% 47% 54% 57% 46% 55% 49% Student Reduced Spending 66% 69% 71% 52% 66% 68% 71% 65% 71% 65% Part Time 16% 20% 15% 11% 16% 17% 18% 11% 6% 32% Accelerate Changed Majors 18% 21% 18% 11% 14% 22% 25% 16% 20% 18% Tax Credits/ Deduc. 45% 39% 48% 44% 46% 36% 44% 48% 46% 36% Early Loan Payments 27% 23% 30% 22% 26% 23% 28% 26% 36% 18%

dAtA tAbles

Total Income <$35k $35-$<100k $100k+ Race/Ethnicity White Black Hispanic School Type 4-year public 4-year private 2-year public

1601 475 806 319 1147 228 259 720 364 466

4% 5% 5% 3% 4% 8% 6% 3% 6% 5%

26% 22% 28% 24% 25% 24% 28% 27% 24% 24%

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Q. I will read several statements about college. Please state whether you: • Strongly agree a. I am willing to stretch myself financially to obtain the • Somewhat agree best opportunity for my/my child’s future. • Neither agree nor disagree b. I would rather borrow to pay for college than not be • Somewhat disagree able/have my child not be able to go at all. • Strongly disagree c. College is an investment in my/my child’s future. d. Having a college degree is more important now than it used to be. e. I would go/send my child to college for the intellectual and social experience regardless of whether I/my child earned more money with a college degree.
Table 22 — Attitudes Toward College, Rated “Strongly Agree” % Strongly Agree Total N Willing to Stretch Myself Financially Rather Borrow Than Not Go Investment in Future Degree More Important Now* Attend College for the Experience Despite Future Earnings*
*Not asked in 2008 or 2009

dAtA tAbles

Students 817 61% 62% 89% 73% 29%

Parents 784 53% 47% 77% 68% 19%

White 1147 51% 52% 81% 69% 21%

Black 228 72% 62% 89% 78% 35%

Hispanic 259 64% 66% 88% 71% 29%

<$35k 475 59% 52% 83% 74% 26%

$35k <$100k 806 56% 55% 83% 70% 23%

$100k+ 319 58% 57% 83% 66% 25%

1601 57% 55% 83% 70% 24%

Table 23 — Attitudes Toward College, Scale 1-5 N Willing to Stretch Myself Financially Rather Borrow Than Not Go Investment in Future Degree More Important Now* Attend College for the Experience Despite Future Earnings*
*Not asked in 2008 or 2009

Strongly Agree 57% 55% 83% 70% 24%

Somewhat Agree 29% 27% 15% 17% 35%

Neither 4% 6% 1% 5% 11%

Somewhat Disagree 7% 7% 1% 4% 17%

Strongly Disagree 3% 5% 1% 3% 13%

1601 1601 1601 1601 1601

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Q. I will read several statements about college. Please state whether you: • Strongly agree a. I wanted/I wanted my child to attend college because • Somewhat agree a college degree is required for my/my child’s • Neither agree nor disagree desired occupation. • Somewhat disagree b. I wanted/I wanted my child to attend college • Strongly disagree because I/my child will earn more money with a college degree. c. College is expected in our family. d. A college education is part of the American Dream.
Table 24 — Reasons for Continuing Education, Rated "Strongly Agree" % Strongly Agree Total N Needed for Desired Occupation Earn More Money Expected in Family American Dream 1601 71% 69% 39% 43% Students 817 71% 73% 43% 40% Parents 784 70% 65% 36% 46% White 1147 69% 66% 33% 39% Black 228 76% 82% 57% 49% Hispanic 259 68% 71% 37% 58% <$35k 475 69% 71% 30% 46% $35k <$100k 806 71% 68% 37% 42% $100k+ 319 73% 70% 58% 41%

dAtA tAbles

Table 25 — Reasons for Continuing Education, Scale 1-5 N Needed for Desired Occupation Earn More Money Expected in Family American Dream 1601 1601 1601 1601 Strongly Agree 71% 69% 39% 43% Somewhat Agree 16% 23% 27% 39% Neither 6% 2% 12% 8% Somewhat Disagree 5% 4% 14% 5% Strongly Disagree 3% 1% 8% 4%

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Q. When thinking about paying for college, to what extent are you worried about each of the following economic factors? Please use a five-point scale, where 5 means very worried and 1 means not at all worried. You may use any of the numbers 1, 2, 3, 4 or 5 for your rating. a. The value of your home will go down. b. The value of your savings or investments will be lower than you expected. c. Loan rates will go up. d. Student loan money will be less available. e. Your child won’t be able to find a summer job to earn money for next semester. (Final year students) Your child won’t be able to find employment after graduation. f. Schools will have to raise tuition to cover their increased costs. g. Scholarship and grant money will be less available. h. Earned income will go down due to job loss.
Table 26 — Parent Economic Concerns, Rated Extremely Worried (5) N Home Value Will Decrease 22% 21% 20% 23% 34% 19% 18% 19% 22% 23% 23% Value of Savings Will Be Lower 21% 18% 23% 25% 31% 17% 21% 13% 18% 28% 23% Loan Rates Will Increase 30% 29% 37% 32% 38% 32% 19% 36% 28% 27% 30% Student Loan Money Less Available 31% 29% 33% 33% 45% 31% 20% 32% 29% 31% 33% Student Won't Find Summer Job 14% 12% 30% 10% 23% 11% 11% 16% 13% 17% 8% Student Won't Find Job after Grad 33% 23% 13% 28% 12% 43% 30% 36% 11% 31% 66% Schools Will Raise Tuition 36% 34% 38% 37% 44% 31% 41% 24% 39% 37% 42% Income Will Decrease Due to Job Loss* 23% 22% 28% 27% 32% 22% 17% 22% 18% 24% 26% Scholarships/ Grants Less Available** 34% 34% 33% 35% 44% 35% 22% 45% 29% 29% 37%

dAtA tAbles

Total Parents Race/Ethnicity White Black Hispanic Income <$35k $35k - <$100k $100k+ Region Northeast Midwest South West

784 603 92 122 166 431 187 179 189 234 183

Table 27 — Parent Economic Concerns, Scale 1-5 N Home Value Will Decrease Value of Savings Will Be Lower Loan Rates Will Increase Student Loan Money Will Be Less Available Student Won't Find Summer Job Student Won't Find Job after Grad Schools Will Raise Tuition Income Will Decrease Due to Job Loss* Scholarships/Grants Less Available**
The following footnotes apply to both tables: Base: Parents of college students *Not asked in 2008 **Not asked in 2008 or 2009

% 1s Not at all Worried 30% 21% 19% 19% 39% 22% 9% 24% 13%

% 2s 14% 14% 12% 13% 13% 20% 5% 13% 15%

% 3s 23% 31% 22% 19% 21% 15% 25% 23% 24%

% 4s 11% 13% 18% 17% 11% 9% 25% 17% 15%

% 5s Extremely Worried 22% 21% 30% 31% 14% 33% 36% 23% 34%

784 784 784 784 784 784 784 784 784

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Q. Has your child/you taken out tuition insurance for this college year?
Table 28 — Use of Tuition Insurance N Total Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic School Type 4-Year State College/University 4-Year Private College/University 2-Year Public/ Community College Borrowing Status Borrowed Did Not Borrow 705 896 2% 1% 31% 35% 67% 63% 720 364 466 1% 2% 1% 29% 37% 37% 70% 60% 61% 1147 228 259 1% 2% 1% 33% 34% 30% 65% 63% 69% 475 806 319 2% 1% 1% 32% 31% 39% 65% 67% 60% 1601 % Yes 2% % Chose Not To 32% % Not Aware of Option 65%

dAtA tAbles

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Q. Who in your family was responsible for deciding what college your child/you would attend?
Table 29 — College Selection Decision-Making Total N Student only Student mostly with some parent input Student and parent equally Parent mostly with some student input Parent only 1601 79% 6% 8% 1% 6% Students 817 84% 6% 3% 1% 5% Parents 784 73% 7% 12% 1% 7% White 1147 81% 7% 8% 0% 4% Black 228 76% 5% 5% 4% 9% Hispanic 259 79% 6% 10% 1% 4% <$35k 475 83% 3% 7% 1% 6% $35k <$100k 806 80% 8% 5% 1% 6% $100k+ 319 69% 8% 15% 2% 5%

dAtA tAbles

Q. Who in your family was responsible for deciding how to pay for college?
Table 30 — Paying for College Decision-Making Total N Student only Student mostly with some parent input Student and parent equally Parent mostly with some student input Parent only 1601 33% 3% 16% 5% 42% Students 817 46% 4% 11% 5% 32% Parents 784 18% 3% 21% 5% 51% White 1147 32% 4% 18% 6% 39% Black 228 30% 5% 10% 5% 50% Hispanic 259 43% 2% 17% 3% 33% <$35k 475 48% 4% 9% 3% 33% $35k <$100k 806 31% 4% 18% 7% 40% $100k+ 319 13% 2% 19% 6% 60%

Q. Please state your level of agreement with the following statement: Before my child/I enrolled, our family created a plan for paying for all years of college.
Table 31 — Financial Plan for College Total N Strongly Agree Somewhat Agree Neither Somewhat Disagree Strongly Disagree 1601 16% 23% 11% 23% 27% Students 817 15% 22% 9% 25% 29% Parents 784 17% 24% 13% 21% 25% White 1147 16% 24% 10% 24% 26% Black 228 12% 26% 8% 25% 1% Hispanic 259 12% 21% 11% 31% 25% <$35k 475 12% 18% 10% 26% 34% $35k <$100k 806 12% 25% 13% 24% 26% $100k+ 319 31% 26% 7% 18% 19%

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Q. With which of these statements do you agree most? a. Parents should be entirely responsible for financing their children’s college education. b. Children should be entirely responsible for financing their college education. c. Parents and children should both be responsible for financing the child’s college education.
Table 32 — Parent and Child Responsibility for Paying for College N Parents should be entirely responsible for financing their children's college education 10% 13% 6% 7% 9% 14% 7% 18% 12% 8% 10% 10% 6% 11% Children should be entirely responsible for financing their college education 15% 14% 16% 18% 16% 9% 15% 10% 14% 16% 14% 16% 12% 16% Parents and children should both be responsible for financing the child's college education 75% 73% 78% 75% 75% 76% 77% 71% 75% 76% 75% 74% 82% 72%

dAtA tAbles

Total Parent Student Income <$35k $35-$100k $100k+ Race/Ethnicity White Black Hispanic Borrowing Status Borrowed Did Not Borrow School Type 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College

1601 784 817 475 806 319 1147 228 259 705 896 720 364 466

Q. Will you/your parents be solely responsible for repaying this borrowed money or will your child/you be jointly responsible for making some payments now or in the future?
Table 33 — Responsibility for Repaying Parent Loans Total N Parent(s) only Student jointly responsible Don't know 776 12% 82% 6% Students 426 4% 87% 7% Parents 350 20% 75% 5% White 536 9% 83% 8% Black 120 14% 84% 2% Hispanic 125 12% 85% 4% <$35k 224 5% 87% 8% $35k <$100k 416 13% 81% 5% $100k+ 136 19% 76% 5%

Base: Parents and students in families where the parent borrowed to pay for college

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Q. Will your child/you be solely responsible for repaying this borrowed money or will you/your parents be jointly responsible for making some payments now or in the future?
Table 34 — Responsibility for Repaying Student Loans Total N Student only Parent(s) jointly responsible Don't know 760 59% 39% 2% Students 416 74% 25% 1% Parents 344 41% 56% 2% White 526 65% 33% 1% Black 119 53% 43% 3% Hispanic 120 43% 57% 0% <$35k 216 75% 25% 1% $35k <$100k 414 53% 44% 1% $100k+ 131 52% 45% 3%

dAtA tAbles

Base: Parents and students in families where the student borrowed to pay for college

Q. On a scale of 1 to 5, 1 being poor and 5 being excellent, how do you rate your child/yourself [student] when it comes to money management?
Table 35— Student Money Management Ability N Total Student Parent Income <$35k $35k - <$100k $100k+ Race/Ethnicity White Black Hispanic Grade Level Freshman Sophomore Junior Senior 5th Year + Borrowing Status Borrowed Did Not Borrow Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College Region Northeast Midwest South West 338 375 484 390 33% 25% 30% 31% 31% 37% 29% 33% 26% 27% 29% 25% 4% 8% 9% 7% 6% 4% 4% 3% 720 364 466 29% 30% 29% 33% 33% 32% 28% 31% 25% 8% 4% 8% 3% 2% 6% 705 896 25% 34% 35% 30% 30% 24% 7% 8% 4% 4% 447 499 317 248 64 24% 32% 34% 27% 38% 31% 28% 35% 41% 29% 32% 27% 25% 22% 29% 8% 8% 4% 9% 5% 6% 5% 2% 2% 0% 1147 228 259 30% 24% 32% 36% 23% 36% 23% 41% 23% 7% 7% 4% 4% 6% 5% 475 806 319 25% 32% 30% 36% 30% 33% 29% 27% 23% 6% 7% 9% 4% 4% 5% 1601 784 817 Excellent 5 30% 20% 40% 4 33% 40% 25% 3 27% 31% 23% 2 7% 7% 8% Poor 1 4% 3% 5%

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Q. Do you/does your child have a debit card? Q. Do you/does your child have a credit card?
Table 36 — Debit Card and Credit Card Ownership N Total Student Parent Income <$35k $35k - <$100k $100k+ Race/Ethnicity White Black Hispanic Grade Level Freshman Sophomore Junior Senior 5th Year + Borrowing Status Borrowed Did Not Borrow Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College 2-Year Private College Region Northeast Midwest South West 338 375 484 390 77% 80% 80% 84% 31% 35% 35% 38% 80% 84% 83% 86% 28% 31% 32% 35% 20% 16% 17% 14% 720 364 466 85% 79% 76% 67% 39% 38% 28% 10% 87% 84% 79% 67% 37% 33% 25% 10% 13% 16% 21% 33% 705 896 89% 74% 38% 33% 90% 78% 36% 29% 10% 22% 447 499 317 248 64 75% 75% 85% 94% 94% 21% 28% 38% 60% 66% 76% 79% 89% 95% 100% 20% 24% 34% 59% 61% 24% 21% 11% 5% 0% 1147 228 259 81% 75% 84% 34% 25% 36% 84% 75% 86% 31% 25% 34% 16% 25% 14% 475 806 319 75% 82% 85% 29% 31% 53% 77% 84% 91% 27% 29% 47% 23% 16% 9% 1601 784 817 Debit Card 80% 87% 73% Credit Card 35% 39% 30% Either 83% 89% 77% Both 32% 37% 27% Neither 17% 11% 23%

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Q. Is the credit card in your name or your parent’s/your child’s name (or both)?
Table 37 — Student Credit Card Holder N Total Student Parent Income <$35k $35k - <$100k $100k+ Race/Ethnicity White Black Hispanic Grade Level Freshman Sophomore Junior Senior 5th Year + Borrowing Status Borrowed Did Not Borrow Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/Community College Region Northeast Midwest South West 104 132 169 148 2% 4% 5% 5% 74% 80% 74% 86% 25% 17% 21% 9% 278 137 132 3% 6% 3% 76% 71% 91% 21% 23% 6% 265 291 3% 5% 83% 74% 15% 20% 95 142 121 148 42 7% 7% 3% 1% 2% 76% 80% 75% 76% 95% 16% 14% 22% 22% 4% 390 56 94 4% 2% 4% 78% 80% 83% 17% 18% 14% 138 249 168 2% 3% 7% 84% 87% 61% 14% 10% 32% 556 320 236 Parent Name 4% 4% 5% Student Name 78% 83% 73% Both 18% 14% 23%

Base: Parents of college students and college students with a credit card

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Q. What would you estimate is the combined outstanding balance on all of your (student)/your child’s credit card(s) today (or on your/his/her most recent monthly statement)? Your best estimate is fine.
Table 38 — Student Outstanding Credit Card Balance N Total Student Parent Income <$35k $35k - <$100k $100k+ Race/Ethnicity White Black Hispanic Grade Level Freshman Sophomore Junior Senior 5th Year + Borrowing Status Borrowed Did Not Borrow Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/ Community College Region Northeast Midwest South West 102 127 161 139 $1,395 $478 $771 $506 $95 $5 $189 $187 28% 47% 28% 28% 3% 6% 6% 3% 268 129 127 $918 $683 $530 $161 $95 $197 30% 39% 33% 2% 4% 1% 258 275 $1,131 $387 $286 $84 24% 40% 4% 1% 88 132 117 145 42 $642 $374 $828 $516 $2,998 $97 $157 $198 $167 $45 31% 36% 22% 39% 38% 4% 0% 2% 1% 11% 372 55 90 $776 $1,211 $667 $89 $478 $243 38% 16% 21% 3% 2% 3% 134 242 156 $633 $977 $521 $191 $199 $67 24% 29% 46% 2% 3% 2% 532 308 225 Average Amount $755 $1,086 $296 Median Amount $196 $255 $81 % Zero 33% 25% 43% % >$4,000 3% 4% 0%

Q. How much do you (parent)/your parents pay monthly on your child’s/your credit card?

Table 39 — Parent Monthly Payment on Student Credit Card N Total Student Parent Income <$35k $35k - <$100k $100k+ Race/Ethnicity White Black Hispanic Grade Level Freshman Sophomore Junior Senior 5th Year + Borrowing Status Borrowed Did Not Borrow Type of School 4-Year State College/University 4-Year Private College/University 2-Year Public/ Community College Region Northeast Midwest South West 102 127 161 139 $116 $132 $94 $37 70% 79% 71% 86% 268 129 127 $114 $121 $18 75% 69% 88% 258 275 $95 $88 77% 77% 88 132 117 145 42 $26 $30 $112 $197 $11 82% 77% 81% 66% 92% 372 55 90 $73 $155 $46 80% 67% 80% 134 242 156 $117 $25 $171 88% 82% 59% 532 308 225 Average Amount $91 $81 $106 % Zero 77% 85% 65%

Base: Parents of college students and college students with a credit card in student’s name or in both parent’s and student’s name

Base: Parents and students with a credit card in student’s name or in both parent’s and student’s name

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8:

tecHNicAl Notes

TARgET POPULATIOn
Ipsos conducted the How America Pays for College survey by telephone between Monday, April 2 and Sunday, May 13, 2012. Ipsos interviewed 1,601 individuals: 800 parents of 18 to 24-year-old undergraduate students and 801 18 to 24-year-old undergraduate students.

SAMPLE dESIgn
Two sample sources were used for this study: • a purchased list of college students aged 18-24 • a list of parents of college students aged 18-24 from Ipsos panels The sample design was a disproportionate stratified probabilistic sample for both students and parents. Both samples were designed to over-represent African Americans and Hispanics, with a minimum of 150 responses from each group in each sample. Interviews were conducted in English and Spanish. The student sample frame was appended with official information on the majority of U.S. colleges, obtained from the National Center for Educational Statistics (NCES). This allowed the sample to be further stratified by relevant variables, such as region, size, and type of college (as shown in Table A). Table A — Distribution of Student Sample Region Midwest Northeast South West Total College Enrollment Size < 5,000 > 5,000 < 5,000 > 5,000 < 5,000 > 5,000 < 5,000 > 5,000 Students 61 134 17 54 97 220 22 196 801

wEIgHTIng
To correct for the disproportionate stratified sample, both samples were weighted using a statistical technique called raking, in which all of the population marginal profiles of interest are replicated in the sample. The sample of parents was weighted by gender, age, race/ethnicity, region, education, and by college information (region, size, and type). The sample of students was weighted by gender, age, race/ethnicity, region, and by college information (region, size, and type). All of the demographic profiles used for both parents and students in the weights were sourced from the February 2012 Current Population Survey (CPS). The National Center for Educational Statistics provided additional data for the college information weights.

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MARgIn OF ERROR (MoE)
The MoE is a measure of sampling error. It is used to quantify the range of possible values for an observed sample statistic taking into account the possible sample variation, i.e., the larger the MoE the greater the uncertainty in the survey results with respect to the statistic being analyzed. More specifically, the MoE can be defined as the maximum absolute difference between the statistic and the actual population parameter being estimated that would be expected from a simple random sample, with a pre-determined confidence level. When estimating percentages from this survey using the whole sample (1,601), the MoE is estimated to be approximately +/- 2.5 percentage points, with a confidence level of 95%. When comparing data between waves, a simple rule of thumb to judge whether the observed difference is statistically significant is to sum the margin of error for the two waves — for comparing the 2011 and 2012 surveys this would be 5%. If the difference is larger, then it is considered statistically significant. If percentages are being estimated from sub-domains of the survey, i.e. not using the whole sample, then the MoE will be higher than the one stated above, and must be re-calculated. Assuming that each domain being compared has a different sample size, the rule when estimating percentages from a base of n cases is MoE(n) = 1 ⁄ √n. In this context, to judge whether the observed difference between two domains (groups) with different sample sizes, say n1 and n2, is statistically significant, this difference should be compared to (1 ⁄ √n1 )+(1 ⁄ √n2 ). If it is larger, then it’s considered statistically significant.

tecHNicAl Notes

EFFECTIvE BASE SIzES
As discussed in the previous section, the MoE depends on the sample size of the domain being analyzed. To serve as guideline of the precision and confidence that the reader should have for the survey estimates, Table B shows how much allowance should be made for the sampling error around a single percentage estimate in the study.

Table B — Margin of Error for Different Domain Sizes Sample Size 50 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 Margin of Error 14.1% 10.0% 7.1% 5.8% 5.0% 4.5% 4.1% 3.8% 3.5% 3.3% 3.2% 3.0% 2.9% 2.8% 2.7% 2.6% 2.5%

CALCULATIng HOw AMERICA PAyS FOR COLLEgE
The primary goal of the How America Pays for College national survey is to understand how and what the “typical American family” is paying for a college education. To enable this understanding and for these figures to be tracked over time, Ipsos has continued to calculate figures for total cost and the use and value of the variety of funding sources in the same way as they have been calculated in previous waves. There are two types of averages presented in this report: one relative to the entire population (the composite scores,” see Tables 11a-d and 12a-d, pp. 31-34) and the other relative only to users of a specific item or funding source (see Tables 1a and 1b, pp. 18-19). Throughout, reported frequencies may not add to 100 percent due to rounding.

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A SNAPSHOT OF

HOW AMERICA PAYS FOR COLLEGE 2012
To view the How America Pays For College Infographic, please visit www.SallieMae.com/HowAmericaPays.

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