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How 4 Types of Families Approach Paying for College

The overwhelming majority of current students and their parents see college as an investment in the future. That unsurprising finding appears in Sallie Mae’s annual “How America Pays for College” report, which was released on Thursday.

Families may agree college is an investment, but it’s one they approach with different priorities and varying degrees of preparation. For the first time, this year’s report divides families into four “personas” based on an analysis of their responses to survey questions about the value of college, reasons for going, and college planning:

Procrastinators (26 percent of the population): Only small fractions of this group reported having a contingency plan for paying for college or a plan to pay for all four years. Sixty-one percent of them said they considered skipping college because of its cost. Compared with the full group, a larger share of procrastinators go to community colleges. Parents in this group pay a smaller share of college costs than do those in the other ones.

American Dreamers (28 percent of the population): While large shares of survey respondents see college as part of the American Dream and say a degree is more important now than it used to be, those views are even more common among this group. Compared with the overall population, the makeup of this group is more heavily low-income, Hispanic, and African-American. A larger share of parents in the group did not attend college.

Reluctant Borrowers (18 percent of the population): Large shares of this group’s members have a contingency plan to pay for college and a plan to cover all four years of expenses. While a majority of reluctant borrowers reported that debt was preferable to forgoing college, a much larger share of the overall population felt that way. Similarly, a small proportion of this group said they would stretch financially to pay for college.

Determineds (28 percent of the population): Only 1 percent of these families considered not pursuing college because of the cost. Large portions have a contingency plan to pay for college and a plan to cover all four years. A larger share of the students attend four-year colleges, compared with the overall group. These families spend more on college, and nearly half of their costs are met with parents’ out-of-pocket contributions.

The report is based on a sample survey of 800 18- to 24-year-old undergraduates and 801 parents of such students conducted by Ipsos, a market-research company. It also uses the information respondents provided on how they pay for college to construct a portrait of what and how the “typical American family” pays.

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