What Percentage of Parents Pay for College?

Even if you’re proud of your child for getting into college, you might not be thrilled about the idea of paying for it. Understandably, some parents feel guilty about not wanting to foot the bill for their kid’s bachelor’s degree. And while many parents help their child pay for school at least partially, not all do.   

You’re not alone If you’re struggling to wrap your head around the cost of tuition. You’re not alone If you’re struggling to wrap your head around the cost of tuition. According to the Princeton Review, 80% of families with university-bound students report that some type of financial aid would be “extremely necessary” to afford their child’s education. Many more are on the fence about whether or not they should pay for their child’s tuition, even if they know they can afford it. To help you understand what percentage of parents pay for college and why, we put together this guide. Read on for stats and tips to help you make your decision.

Key takeaways 

  • 77% of parents cover a portion of their child’s college costs using savings and income.
  • 18% of parents rely on borrowed funds to cover college expenses.
  • On average, parents of undergraduate students chip in about $13,000 per school year.
  • You can reduce the burden of college tuition by filling out the FAFSA®, which will ensure your family receives all possible federal aid and grants.
  • A 529 college savings account is a tax-advantaged account designed to help you save money for your child’s college.

What percentage of parents pay for college? 

According to the oft-cited Sallie Mae study “How America Pays for College,” 77% of American families used parent income and savings to pay for some of their kid’s college expenses. Another 18% of parents use borrowed funds to pay for some portion of their child’s higher education. Note that we can’t simply add these two numbers together because there’s likely some overlap (i.e. many parents use both savings and borrowed funds). But, based on these statistics, we can safely assume that the percentage of parents paying for college is somewhere above 77%. 

How much do parents pay for college?

During the 2021/2022 school year, the average parent covered about 43% of their student’s college costs using income and savings. Parents covered an additional 8% of that cost by taking out loans, according to the Sallie Mae study. The average total parent contribution came out to $13,000 per year. 

So, what types of costs do parental contributions typically cover? That runs the gamut from tuition and fees to living expenses like room and board. Often, what a parent decides to cover depends on what other funding is available. If your child gets a scholarship that covers the majority of their tuition, you’ll most likely be chipping in to pay for other costs like books, computers, or school supplies.

How do parents pay for college? 

These days, there are many different ways to pay for college. Here are some of the most popular to help a child afford their degree:

529 savings plan

In the U.S., each state offers a tax-advantaged savings account called a 529 plan. Money saved in these types of accounts can grow and be withdrawn tax-free as long as the money is used for college expenses. According to the Sallie Mae study, about 33% of families use specialized 529 plans and other college savings accounts to fund their children’s higher education.

Depending on which state you live in and what type of plan you select, your interest rates will vary. (You can shop around to find the best rates available.) Once you choose a plan, you’ll be able to deposit funds into the account. Deposits aren’t tax deductible, which means you will have to pay taxes on any income before it goes into your 529. However, some states offer tax breaks or other incentives to make 529 plans even more enticing.

When it’s time to send your kid off to college, you can access this money — along with the interest it has accrued — without paying taxes on those earnings.


Parent income — i.e., the money a student’s parents, legal guardians, or step-parents earn from their jobs — is one of the primary sources of funding for the average kid’s college degree. In the past year, 63% of families used one or more parent’s current income to fund college expenses, Sallie Mae reports. 


Student loans are a common source of funding for parents as well as college students. About 18% of families rely on parental borrowing to pay for a college education. The federal government offers Direct PLUS loans, often called Parent PLUS loans, which are federal student loans that parents can take out on behalf of a child. They tend to have slightly higher interest rates than undergraduate student loans, but they offer many of the same protections, like access to federal deferment, forbearance, and even some loan forgiveness programs.

Other savings or investments

If you have cash stored in a traditional savings account or invested in the stock market for a rainy day, you could use those funds to help cover your child’s college education. In 2022, about 37% of families used parent savings and investments outside of college savings plans to boost their student’s college funds. 

Retirement savings withdrawal

If necessary, you may be able to withdraw from a retirement account to pay for your child’s tuition. Keep in mind that, depending on your plan and age, you might be subject to a penalty for early withdrawal. Even so, according to Sallie Mae, about 18% of families dipped into their retirement funds during the 2021-2022 school year to help cover their child’s education. 

One thing to keep in mind: parental contributions typically shouldn’t impact your retirement plan. If you know you have way more money saved for retirement than you’ll need, it may be worth tapping into those funds. But if siphoning money from a retirement account will affect your ability to retire on time, you might want to reconsider. 

Student loans for parents 

Loans can be an effective way to close the gap between your child’s financial aid and your ability to pay their tuition. The federal Parent PLUS loan is one popular option. Last year, Parent PLUS loans made up 12% of all parent borrowing for college tuition. These types of loans tend to have lower, fixed interest rates, which makes them more affordable than some private loans. 

Repayment plans for federal loans include income-based repayment options, which can help you pay back your loan while keeping up with other financial obligations like a mortgage or credit card debt. Parent PLUS loans may also be eligible for some types of federal student loan forgiveness

To qualify for a Parent PLUS loan, you must be the biological or legally adoptive parent of a dependent undergraduate. If you’re ineligible for federal loans — or if you’ve already hit your federal borrowing limits — you can consider private student loans. To qualify for a private loan1, you’ll need good credit and a stable income. Be sure to research different lenders to ensure you’re getting the lowest interest rates available to you. 

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How to pay for college without loans 

Student loan debt can take decades to get out of, and taking on too much can impact not just your child’s future, but yours, too. If you’d prefer to avoid loans, there are a number of other ways to make college more affordable. 

Fill out the FAFSA®

Each year, families leave billions of dollars in federal aid on the table by not completing the FAFSA®. The FAFSA®, or Free Application for Federal Student Aid, is a questionnaire provided by the U.S. Department of Education that lets you report the status of your personal finances and therefore qualify for federal aid. The FAFSA® is free to submit, but not everyone takes advantage. In 2021 alone, for example, $3.7 billion dollars of Pell Grant aid was left unredeemed, simply because students and their parents ignored this one form. 

Even if you believe your family’s income is too high to qualify for federal financial aid, you should still complete the FAFSA® every year. Having a complete application automatically puts your child in the running for government grants and federal work-study programs. This year, the application opens in December 2023. Since some grants and programs are first-come, first-served, strive to fill out the FAFSA® as early as you can.

Help your child apply for scholarships and grants

Unlike loans, scholarships and grants come with no strings attached; they never need to be repaid. In 2022, 73% of families used some type of scholarship or grant to support their undergraduate students. While many people assume that scholarships are only for students with high GPAs or stellar athletic records, the truth is that scholarship programs exist for every type of student. 

The first step to applying for scholarships is to find the ones your student is eligible for. To help with that task, Going Merry curates thousands of high-quality awards that students can apply for directly through our website. As a parent, you can empower your child by using Going Merry to identify scholarship programs and encourage them to apply.

Guide your student to choose a less expensive school

One of the best ways to save money on college tuition is to choose an affordable school. If finances are top of mind, guide your child to a school with a lower cost of attendance. In-state schools and public colleges both tend to be more affordable than private colleges. 

If your child has their heart set on a school that’s outside your budget, nudge them to explore satellite or community colleges as well. These smaller schools are a perfect place to begin an undergraduate degree before transferring to their dream school. Most four-year colleges allow community college students to easily transfer credits. This means your child can get their name-brand degree at a fraction of the sticker price. 

Encourage your child obtain college credits in high school 

These days, it’s possible to arrive on campus with a number of college credits already in hand. Advanced Placement (AP) classes allow high school students to take accelerated courses and test out of college credits. A similar program, the Prior Learning Assessment (PLA) program, allows students with real-world skills to obtain hours of college credit for volunteer work or job experience.

Many high schools around the country also offer dual enrollment programs. These programs allow high school students to take community college courses for both high school and college credit. Dual enrollment is only available at select high schools. If it’s available at your student’s school, encourage them to double the impact of their time by earning credit for two degrees at once.

Find additional or part-time work — and ask your child to do the same

According to the Sallie Mae study, about 56% of families rely on their student’s income and savings to cover college costs. This includes part-time work like babysitting or working at a local restaurant between classes or semesters. If your child has spare time, encourage them to look for this kind of work to help pay for their own tuition. If you need to supplement your own income, consider exploring similar options for yourself. 

Get matched to scholarships with Going Merry

From better career prospects to opportunities for personal growth, obtaining a college education can open many doors for your child. These days, most parents pay for at least some of their kid’s college, but there are a number of ways to source additional funding. One of the best ways to reduce the burden of college tuition is to explore college scholarships. 

Here at Going Merry, we’ve created a robust scholarship database with thousands of awards. All of them are carefully vetted and none of them require application fees. Plus, Going Merry will automatically match your child with scholarships that fit their eligibility profile. Don’t waste your time scrolling through awards that don’t fit the bill. Instead, both you and your child can create Going Merry accounts. You can then help your student populate their profile with hobbies, interests, academic achievements, and other information. After that, we’ll send scholarships directly to your student — all they have to do is apply. 

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

1 Before applying for private student loans, it’s best to maximize your other sources of financial aid first.  It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grant, and work-study opportunities.  2) Next, fill out a FAFSA(R) form to apply for federal student loans.  Federal Direct subsidized and unsubsidized loans, excluding PLUS Loan for Parents and PLUS Loan for Graduate and Professional Students which require a credit check and a credit worthy endorser if the parent or graduate or professional student has adverse credit, do not require a credit check or cosigner, and offer various protections if your struggling with your payments.  3) Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2.  For more information, visit the Department of Education website at https://studentaid.ed.gov.


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