• These days, parents are paying nearly half of college costs.
  • Although parents are shouldering most of the responsibility, there are ways students can chip in and help their parents avoid taking on too much debt, higher education experts say.
  • There is plenty of merit-based aid available and free scholarship matching services to help students.

College is one of the biggest purchases you'll make in a lifetime, yet few families have a solid plan for how to pay for it.

Most often, parents are on the hook for the bill, according to Sallie Mae's annual How America Pays for College report. For the 2021-22 school year, parents covered 43% of the cost of college with their income and savings, while students picked up about 11%. But students can contribute in other ways too, experts say.

"Given the cost of college, parents paying for their children's college education is the norm these days, not the exception," said Kalman Chany, a financial aid consultant and author of The Princeton Review's "Paying for College." 

"Nevertheless, students and their parents need to plan ahead and be savvy about the financial aid process." 

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Who pays for college and how

Most students and their parents rely on a combination of resources, Sallie Mae's data shows.

As of the latest tally, families spent $25,313, on average, on college expenses in the 2021-22 academic year, primarily by tapping into their income and savings. More than 7 in 10 families also used scholarships and grants — money that does not have to be repaid — to help cover the costs, and roughly 4 in 10 families borrow, or take out loans, the education lender found.

As the cost of a degree continues to rise, price has become a bigger consideration.

College-bound students and their parents now say affordability and dealing with the debt burden that often goes hand in hand with a college diploma is their top concern, even over getting into their first-choice school, according to The Princeton Review's 2023 College Hopes & Worries survey.

Maximize 'other people's money'

It is always better to use "other people's money," Chany said, referring to financial aid, to minimize out-of-pocket costs and avoid taking on too much student debt.  

Even now, there is still plenty of merit-based aid available and free scholarship matching services to help students find it.

It's also not too late for families struggling to afford college next year to apply for financial assistance or ask the college financial aid office for more money.

Set financial expectations early

"When it comes to who is responsible for paying for college, it really is a family decision," said Sallie Mae spokesman Rick Castellano. "Have the talk early." 

It's important to set clear expectations for how your child might contribute and consider the options, such as scholarships, grants, loans and work-study programs, he advised.

"Setting expectations and involving students in the college planning process ensures everyone enters this major decision with eyes wide open," Castellano said.

Find ways for students to defray costs

Ultimately, the ability for students to pay and how to share the cost is unique to each family's financial situation, added Ross Gittell, an economist and president of Bryant University in Smithfield, Rhode Island.

But even if students aren't on the hook for the tuition bill, they can contribute in other ways, he added.

In fact, many undergraduates work while they are enrolled in college. As of 2020, 74% of part-time students and 40% of full-time students were employed, according to the National Center for Education Statistics.

It's best to strike a balance, according to higher education expert Mark Kantrowitz. Putting in 12 hours or less per week has positive effects, but "every additional hour cuts academic performance," he told CNBC.

There are also many opportunities for students to cut down the cost while they are still in high school.

From dual enrollment to course sharing, "those accelerated programs reduce the out-of-pocket costs" at the outset, Gittell said.

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