New study finds that more and more families are taking out student loans in Biden’s economy
The study also indicated that nearly half of families experienced stress over FAFSA delays.
As inflation continues to increase the costs of goods and services in America, more students and families are electing to defer the financial burden attached to a college education.
A study released by student loan provider Sallie Mae and Ipsos earlier this month revealed that 49 percent of families who responded said they borrowed money in order to finance their child’s college education, up from just 41 percent in 2023.
In a news release accompanying the study, Sallie Mae’s vice president Rick Castellano stressed the importance of services that help students to access financial support, noting that these programs would benefit from greater transparency.
“Borrowing for college makes sense for some families, but it’s critical to have a plan and do so responsibly,” Castellano said. “More clarity around the actual costs of college, greater transparency in federal lending programs, and better efforts to connect students with grants and scholarships would go a long way in helping families make informed decisions about where to go to school, and whether and how much to borrow for higher education.”
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The study also found that 44 percent of families in the survey that completed the Federal Application for Student Aid (FAFSA) reported experiencing stress in relation to widespread delays in sending students their offer letters.
“Until you have that award letter in your hand, and you see what you’re being offered, it becomes an unknown, and that can create stress or frustration if you have not received it,” said Scott Miller, the University of Virginia’s director of financial aid.
The increasing prevalence of loans comes in the wake of record-breaking levels of inflation. The year-over-year inflation rate peaked at 9.1% percent in June 2022. That number fell to 3 percent by June 2024 but still remains well above the Federal Reserve’s long-term target of 2 percent inflation.
This has especially hurt families who have children in both college and grade school, who must contend with both rising tuition and the expenses associated with “back to school” shopping.
Pascale Small, a mother of three in California, told The Hill that she now must buy classroom materials for other students in addition to her own children’s school supplies .
“And most of our lists don’t just include things that I’m buying for my kids to use, but they also include school supplies for the whole class to use,” Small said. “So our back-to-school shopping includes having to purchase more than what I will potentially need, more than what my kids will need for schools that I feel like need to be fully funded, and as I struggle already trying to make sure that my kids have what they need for school.”