College is more expensive than ever. Here's how families are paying the tab

• College affordability is increasingly problematic in the wake of the pandemic. Yet families rarely pay the entire tab.
• As of last year, the amount families actually paid was $26,373, on average, according to areport from Sallie Mae.

In the wake of the pandemic, many families are taking a hard look at college and whether it is worth the high cost.

Tuition and fees plus room and board for a four-year private college averaged $50,770 in the 2020-21 school year; at four-year, in-state public colleges, it was $22,180, according to the College Board, which tracks trends in college pricing and student aid. 

When adding in other expenses, the total tab can be more than $70,000 a year for undergraduates at some private colleges or even out-of-state students attending four-year public schools.

Yet few students and their parents pay the full amount.

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As of last year, the amount families actually paid was $26,373, on average, according to Sallie Mae's annual "How America Pays for College" report. That figure is relatively unchanged from a year earlier.

While parent income and savings cover nearly half of college costs, free money from scholarships and grants accounts for a quarter of the costs and student loans make up most of the rest, Sallie Mae found.

Scholarships are a key source of funding, yet only a little more than half of families use them, the education lender said.

About 6 in 10 who used scholarships got them directly from their student's school and received $9,797, on average.

The vast majority of families who didn't use scholarships said it was because they didn't even apply.

"You don't have to pay for it all," said Howard Hook, a certified financial planner and CPA with the wealth management firm of EKS Associates in Princeton, New Jersey.

"There's nothing wrong with using a combination of resources," he said, including work study and even some loans.

During Covid, making ends meet became an even bigger consideration among students and parents. 

Now, nearly two-thirds of parents are worried about having enough money to cover the cost, according to a separate report by Discover Student Loans.

And still, fewer families are applying for financial aid.

The Free Application for Federal Student Aid, or FAFSA, serves as the gateway to all federal aid money, including loans, work-study and grants, which are the most desirable kind of assistance.

This year, just 68% of families completed the FAFSA, down from 71% in 2019-20 and 77% the year before that, Sallie Mae found.

"It's concerning to see so few families filing the FAFSA," said Ashley Boucher, a spokeswoman for Sallie Mae. "There's clearly some misunderstanding about just who the FAFSA will help and how it will help."

Many families mistakenly assume they won't qualify for financial aid, Boucher said. In fact, "nearly all who apply are going to qualify for something."

FAFSA completion can also boost a student's likelihood of going to college and graduating, studies show.

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