Lori Meadows
The cost of college is a significant concern for many students, with tuition fees, accommodation, and other expenses often posing financial challenges. In 2022, around 67% of college students were reportedly paying for their education themselves, according to a survey by Cengage and University Business. This trend is also reflected in a College Ave Student Loans survey, which found that 45% of respondents at four-year colleges relied on their savings and income. The rising cost of attendance (CoA) at colleges, which includes tuition, fees, accommodation, and other living expenses, has led to an increase in students taking on financial responsibilities. While scholarships, grants, and federal work-study programs provide some relief, the majority of students still face financial struggles, often balancing work and studies to make ends meet.
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What You'll Learn
Students paying with their own savings and income
The cost of college is a significant concern for many students, with tuition fees being the primary expense that students struggle to afford. While some students rely on scholarships, grants, loans, or parental funds, a notable number of students are paying for their college education with their own savings and income. This trend is supported by various surveys and reports, indicating a shift towards greater financial independence among college students.
The College Ave Student Loans survey, conducted by Barnes & Noble College Insights, found that 45% of respondents attending four-year colleges paid for their education with their own savings and income. This figure marked an 8% increase from 2019, when 37% of students reported using their personal funds. The survey also revealed that students who relied solely on their savings and income experienced less financial stress compared to the previous year, with 68% reporting stress about the cost of college in 2022, down from 83% in 2019.
Another survey by Cengage, an edtech provider, found that 65% of students were shouldering education expenses entirely on their own. This survey, conducted in July 2022, polled 1,200 Americans aged 18-44 enrolled in two-year or four-year colleges for undergraduate degrees. The results highlighted the ongoing struggle with affordability, as students juggled tuition and other costs. Despite this, a strong belief in the value of a college education persisted, with 81% of students indicating that their education would lead to financial independence.
The trend of students paying for college with their own savings and income is also reflected in a report by University Business. The report stated that 67% of college students were fully paying for their education, with many facing financial challenges. On average, these students had only \$250 left in savings after making payments, underscoring the financial strain of college expenses.
While students using their own funds to pay for college demonstrate financial independence, it is important to note that the cost of attendance (CoA) includes various expenses beyond just tuition. CoA encompasses the cost of textbooks, supplies, room and board for on-campus students, and other living expenses such as apartment rental or groceries. These additional costs can significantly impact a student's financial situation, especially when coupled with the challenge of high tuition fees.
To supplement their savings and income, some students choose to work while studying. The Federal Work-Study Program (FWS) assists students in finding employment to earn money during their college years. In 2020, this program benefited approximately 613,000 students, who earned an average of $1,650 for the school year. Additionally, 18% of all students participated in Federal work-study, earning an average of $1,847 per academic year.
In conclusion, the rising number of students paying for college with their own savings and income underscores the importance of financial independence and the perceived value of a college education. However, the significant financial burden, including tuition and living expenses, remains a pressing concern for many students. As affordability continues to be a barrier, there is a growing need for collective efforts to reduce cost barriers and ensure that students can pursue their educational goals without making difficult trade-offs.
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Tuition costs and affordability
The cost of college tuition has been a growing concern for students and their families. In the 21st century, the average cost of college has more than doubled, with a compound annual growth rate (CAGR) of 4.04% for tuition. The average in-state student at a public four-year institution spends $27,146 for one academic year, while the average private nonprofit university student spends $58,628 per year. The cost of a college education includes not just tuition but also room and board, books, and other expenses, which can quickly drive up the total cost.
The burden of these costs often falls on students themselves. According to a report, 67% of college students are fully paying for their own education, a figure that has seen an 8% increase since 2019. Only about 10% of students have their entire college paid for by their parents. Many students are reluctant to take on student loans, given the student loan debt crisis, and would prefer to work while studying to support themselves. In 2020, 25% of full-time students worked at least 20 hours a week, and 40% of part-time students worked at least 35 hours a week.
The rising cost of tuition has led to calls for colleges to lower their fees and provide more affordable access to course materials. Students have indicated a willingness to trade amenities for better learning support and more affordable options for course materials. Some colleges have responded by freezing tuition costs during the COVID-19 pandemic and offering flexible online programs that allow students to work while earning their degree.
Despite the financial challenges, students and their families continue to believe in the value of a college education. This commitment is reflected in the survey results, which show that fewer students reported feeling stressed about the cost of college in 2022 compared to the previous year. However, the increasing cost of tuition and the growing reliance on student loans remain significant concerns for those seeking to pursue higher education.
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Student loans and debt
A 2022 report revealed that 67% of college students are fully paying for their education. This is an increase from 2019, when 37% of students used their own funds for college. The top method of paying for college was merit-based financial aid, such as scholarships and grants, cited by 51% of students. This was followed by students relying on their parents' savings and incomes (41%), and those taking out federal student loans (41%).
Despite this, affordability remains a significant barrier for many students, with tuition costs being the most challenging expense to afford. To overcome this, students are working while studying, with 25% of full-time students and 66% of part-time students working at least 20 hours a week.
The student loan debt crisis in the United States is a pressing issue, with a total debt of $1.814 trillion as of 2025. Federal student loan debt makes up 91.6% of this figure, with an average debt balance of $39,075. The total average balance, including private loan debt, may be as high as $42,673. The average public university student borrows $31,960 to obtain a bachelor's degree.
The accumulation of student loan debt has shown some signs of slowing, with a 1.98% year-over-year decline in the fourth quarter of 2023. However, the total student loan debt increased 1.66% year-over-year in the fourth quarter of 2022.
Student loan debt forgiveness programs have provided some relief, with $46.8 billion in federal student loans forgiven through PSLF and the Teacher Loan Forgiveness Program. The CARES Act, introduced between the second and third quarters of 2020, also offered student loan debt relief to approximately 35 million borrowers.
Furthermore, racial disparities exist in student loan debt. Black bachelor's degree holders are the only racial or ethnic group whose average amount owed four years after graduation is greater than 100% of the amount borrowed. This means that, on average, they owe more than they originally borrowed.
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Parental contributions
While an increasing number of students are paying for their college education independently, parental contributions remain a significant aspect of financing college expenses. In 2023, a survey by Sallie Mae and Ipsos found that parental contributions averaged $11,150 per year, constituting the most substantial portion of a student's annual college costs. This amount is influenced by factors such as the student's living arrangements and the parents' income.
The survey also revealed that scholarships and grants, student income and savings, and loans played a significant role in financing college, contributing approximately $8,150, $2,760, and $5,510, respectively. However, it's important to note that the survey included only about 1,200 undergraduate students and their parents, which may not fully represent the diverse financial situations of all college students and their families.
According to a National Student Money Survey in 2024, the average student received £171 per month from their parents. This amount can vary depending on the parents' income, with the understanding that parents earning below a certain threshold may not be able to contribute as much, if at all. The student's living arrangements also play a role, as those living at home may have different financial needs than those living away from home.
In the United States, the Student Finance system uses means-testing, often taking into account the parents' income to determine the amount of Maintenance Loan provided to the student. This loan is intended to cover living costs and can vary based on parental income. It's important for students to understand their financial aid packages and communicate any gaps in funding to their parents, as this can impact the expected parental contributions.
While parental contributions are significant, they are not the sole source of college funding. Students may also work part-time or full-time to contribute to their education and living expenses. Additionally, scholarships, grants, and loans play a crucial role in bridging the financial gap, with scholarships and grants providing larger sums than loans in some cases.
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Scholarships, grants, and work-study programs
Scholarships are typically awarded based on merit, and students can apply for as many private scholarships as they want. Private scholarships are often provided by organizations or businesses, which may specify requirements that applicants must meet. These could include pursuing a particular field of study or attending a regional college. Scholarship applications usually involve a separate submission process and may require essays, recommendations, or other supporting materials.
Grants are another crucial source of funding for students. In the United States, the Free Application for Federal Student Aid (FAFSA) is used to determine eligibility for federal grants. There are no age restrictions for federal aid, and adult students can access the same grants as traditional students. Additionally, grants are available for all types of students, including returning students.
Work-study programs provide students with financial aid the opportunity to earn money while attending college. The Federal Work-Study Program (FWS) helps place eligible students in jobs, allowing them to work while earning their credentials. In 2017-2018, over 3,000 schools participated in FWS, benefiting about 613,000 students.
The availability of scholarships, grants, and work-study programs helps to alleviate the financial burden of college tuition and related expenses. With the rising cost of education, these funding options are crucial in making college more accessible and affordable for students from diverse backgrounds.
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Frequently asked questions
According to a 2022 Cengage survey, 65% of college students are paying for their education themselves. Another source places this number at 67%.
The average cost of attendance for a student living on campus at an in-state public 4-year institution is $27,146 per year. Out-of-state students pay $45,708 per year, and private, nonprofit university students pay $58,628 per year.
Students use a variety of means to pay for college, including loans, scholarships, parents' money, gifts from relatives and friends, and their own earnings.
In 2020, 25% of full-time students worked at least 20 hours a week, and 66% of part-time students worked at least 20 hours a week. 40% of part-time students worked at least 35 hours a week.
