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How America Pays for College

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This year’s "How America Pays for College" report from education solutions company Sallie Mae® and research firm Ipsos found students attending Historically Black Colleges and Universities (HBCUs) spent an average of $28,545 in academic year 2023–24. The largest funding source was grants and scholarships, covering 44% of costs while family income and savings covered 29%, borrowed funds covered 26%, and friends and relatives contributed 1%.

Compared to families overall, more students enrolled at HBCUs were able to identify what is included in a financial aid offer or name potential reasons for filling out the Free Application for Federal Student Aid (FAFSA®). Three-quarters (77%) of students attending an HBCU reported completing the FAFSA for academic year 2023-24. 

In addition, 88% of HBCU students agree that earning a college degree will create opportunities they wouldn’t have had otherwise, and 81% believe it will translate to a higher earning potential. That said, only 33% of HBCU families reported developing a plan to pay for all years of college compared to 59% of students attending other institutions. 

While cost was the biggest factor in the college decision-making process for HBCU students (89% eliminated schools from consideration based on cost), HBCU students value the cultural significance of their schools: 56% believed an HBCU would provide a more supportive community of people with similar backgrounds and cultural experiences. 47% believed an HBCU would provide a more diverse college experience, 31% thought it was important to have pride in the school’s history in educating Black and Latino students.

More students enrolled in HBCUs relied on student borrowing (43% vs. 30% overall). Federal Parent PLUS loan average balances for students attending HBCUs were on average $14,207 compared to $5,795, for those attending other institutions. 

Access the complete report at www.salliemae.com/howamericapays.

Beware of Debt Relief Offers

A number of government agencies, including the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission, and the Department of Education, have expressed concerns about student loan debt relief practices.

  • Beware of promises of immediate loan forgiveness or debt cancelation. Student loan debt relief companies or law firms do not have the ability to negotiate a “special deal” with Sallie Mae.
  • They may tell you to stop making loan payments to your student loan servicer, but that may result in delinquency, default, or negative marks on your credit report.

Warning Signs

The CFPB warns that a student loan debt relief company may be trying to take advantage of you if they:

  • Pressure you to pay high up-front fees.
    If a debt relief company requires you to pay a fee immediately or tries to make you sign a contract on the spot, it may be a scam. Avoid companies that require payment before they actually do anything, especially if they try to get your credit card number or bank account information. Not only does your student loan servicer offer free assistance, taking payment for debt relief services before providing help is often illegal.
  • Demand that you sign a “third party authorization.”
    You should be cautious if a company asks you to sign a “third party authorization” or a “power of attorney.” These are written agreements giving them legal permission to talk directly to your student loan servicer and make decisions on your behalf. In some cases, these companies may even step in and ask you to pay them directly, promising to pay your servicer each month when your bill comes due.

Getting Help

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