Sallie Mae: Picture Life After College Before Paying for It

When you (or your kid) attend college, you’re betting that the cost will be worth the degree and the career to which it leads. About 6 in 10 families (59 percent) say they make a financial plan, according to Sallie Mae’s annual “How America Pays for College” report.

But, Sallie Mae adds, the plan often fails to account for value or return on investment (ROI), leaving many students with burdensome education debt.

“What we’re seeing is, while that financial plan is there, families are not spending as much time on the outcomes piece,” says Sallie Mae’s vice president of communications, Rick Castellano. “Having frank conversations, honest and open conversations, not only on how much we can pay for college, but then also [asking] ‘What does life look like after college?’ would really go a long way in helping families make the most informed decision about higher education.”

Families aren’t considering factors that can shift the ROI of college

Despite the cost of college far outpacing inflation over the decades and the student loan repayment maze becoming increasingly complex, families still believe that attending college is key to lifetime earnings. (Bureau of Labor Statistics data also links higher credentials with higher median earnings.)

But we have a long way to go in achieving that ideal ROI. According to the Sallie Mae report, which surveys 1,000 undergraduate students and 1,000 parents of undergrads, those family financial plans are falling short.

The onus to consider student outcomes falls squarely on families

About 69 percent of credentials — from certificates and associate’s degrees all the way up to doctoral and professional degrees — have a positive ROI, according to a 2024 analysis by the think tank, FREOPP.

That’s comforting, but avoiding the 31 percent of programs with a negative ROI is the hard part.

The past two presidential administrations attempted to help:

• The Biden Administration’s Education Department undersecretary, James Kvaal, told Bankrate about the Financial Value Transparency framework, which aimed to supply students with actionable information, including how much they could expect to borrow for their degree and how much they might earn from it.
• The Trump Administration’s Big Beautiful Bill also sought to hold schools accountable, but by shutting off the federal aid fire hose to colleges and universities that didn’t see their graduates earn at least as much as their high school-graduating peers.

Even if these initiatives and others like them prove successful, it will still be up to parents and students to conduct a cost-benefit analysis before enrolling in college. The good news: There are tried-and-true ways to limit your costs.

4 ways to increase your ROI — before you enroll and borrow

1. Always file the FAFSA

Sallie Mae statistic: Of the nearly 3 in 10 families (29%) that didn’t complete the Free Application for Federal Student Aid (FAFSA), 34 percent believed their income was too high to qualify for assistance. And most glaringly, 20 percent of that group of non-FAFSA-completing families earn less than $50,000 annually.

Bankrate’s analysis: The FAFSA is the gateway to federal student loans, but it also unlocks access to federal, state and institutional grants, scholarships and work-study programs. Whether your family rakes in $50,000 per year or $500,000, it’s always wise to fill it out.

2. Seek gift aid that doesn’t need to be repaid

Sallie Mae statistic: Nearly half of respondents (46 percent) agreed to some extent with the misconception that scholarships are reserved for students with “exceptional grades or abilities.”

Bankrate’s analysis: Like the FAFSA, the world of private scholarships is “another area where there’s just a lot of confusion about eligibility and availability,” says Castellano. The truth: There are need-based aid programs and merit-based scholarships from a wide variety of sources, including your (parent’s) employer, a charitable organization or your state’s higher education authority. And no, you don’t need a 4.0 GPA or record-breaking time in the 40-yard dash to qualify for most of them.

3. Don’t agree to pay your school’s sticker price

Sallie Mae statistic: Almost half (47 percent) of students and parents participating in the survey reported paying less than their school’s published price for the 2024-2025 school year.

Bankrate’s analysis: Shop for a school the way you’d browse, price-compare and select any other big-ticket item. The more information you have — including the costs and financial aid packages of multiple schools — the more leverage you have to negotiate your top-choice school down to a friendlier price tag.

4. Treat loans as a true last resort — and only after you’ve analyzed ‘outcomes’

Sallie Mae statistic: About half (48 percent) of families borrow for college, and 72 percent said they’d rather take on debt than not attend at all.

Bankrate’s analysis: Fortunately, it’s not an either/or, black-and-white choice. There are ways to attend college without going into debt — but not for every student or every program. And when a debt-free college experience isn’t realistic, borrowing can be done responsibly if you’ve laid out your potential postgraduate scenarios. Even borrowing a federal student loan or one of the best private student loans can be wise if it’s truly necessary and is accounted for in your ROI.

What’s your next step?

If you’re wondering about the smartest ways to pay for college, it always helps to consider where peers are succeeding or falling short. Sallie Mae’s data gives us a window into both.

If you (or your student) are nearing enrollment, it’s time to make your plan. Since the single biggest determinant of your college costs — and ROI — is your program choice, let’s start there. Sallie Mae touts its Scout College Search tool, but you can also utilize the Department of Education’s College Scorecard, among other free resources available online. 

As your program and school options come into focus, consider our thorough guide to financial aid. Before you commit, compare the total multi-year cost, expected aid after FAFSA, entry-level pay for your field and alternatives that offer the same job for less.