College Expenses: Self-funded Vs Parents

Hey there, I have a financial question - how much do most people usually pay for college themselves as opposed to their parents contributing? Any thoughts or experiences would be appreciated.

In financial conversations about college, it can greatly vary from family to family based on their unique circumstance and college financing plans. There's no one-size-fits-all answer to your question. However, we can consider some general trends to give an idea.

According to a national study called "How America Pays for College," conducted by Sallie Mae in 2020, families reported that the largest chunk of their college payments, around 44%, came from family income and savings. The rest is covered by scholarships and grants (around 25%), student loans (around 19%), parent borrowing (around 7%), and student income and saving (around 5%).

So, you can see that in many cases, parents tend to bear the majority of the college expense burden. Still, it's common for students to also contribute by working part-time jobs, saving money from high school jobs, taking out student loans, or earning scholarships and grants.

One thing potential college students do to lessen the financial burden is to work to secure as many scholarships as possible. There are thousands of them out there, and they can significantly reduce the expense.

Furthermore, financial aid plays a massive part in this answer. Families with low income can qualify for enough aid that the student won't need to pay for anything except living expenses.

Remember, these are just averages, and every student and family's situation is different. It might be prudent to sit down and have a frank conversation about what both parties are capable and willing to contribute. It's never too early to create a financial roadmap for your college education.

And remember, if you're applying to some top-tier private colleges and your family income falls under a certain threshold, you could attend college for free or at a very low cost. For example, at Harvard University, families earning less than $85,000 annually pay zero towards the cost of attendance. And those that earn between $85,000 and $150,000 annually pay 0-10% of their income. Understanding these financial aid options can really help in navigating the financial responsibility aspect.

Again, it varies, but hopefully this gives you an understanding of the average breakdown.