1. Driving Uncertainty into Opportunity How America Pays for College 2013 Conducted by Ipsos Public Affairs Sallie Mae’s National Study of College Students and Parents Sonja McMullen Director, Business Development Sallie Mae

2. Driving Uncertainty into Opportunity Background Study Objective Determine how American families are paying for college – Trend over time behaviors and attitudes related to the purchase and value of higher education Methodology Sixth annual survey and report Quantitative telephone interviews conducted April-May 2013 – 800 undergraduates enrolled AY 2012-13, ages 18-24 – 802 parents of undergraduates Composite of how the ‘typical’ family pays for college is a mathematical representation created in 2008 and applied consistently each year. – The composite illustrates the proportion of funding by category that pays for all college costs across all families.

3. Driving Uncertainty into Opportunity Attitudes and Values

4. Driving Uncertainty into Opportunity Optimism Emerging Belief in the value of college is unwavering Parents continue to worry about paying for college, but to a lesser degree Parents are more optimistic than they have been Only 9% of families considered their student not attending college at all due to cost

5. Driving Uncertainty into Opportunity Willing to Stretch Financially Rather Borrow Than Not Go An Investment in The Future Degree More Important Now Strongly Agree Somewhat Agree *Not asked in 2008 or 2009 Agreement with Value of College, Year-Over-Year

6. Driving Uncertainty into Opportunity Agreement with Reasons for Attending College, Year-Over-Year Needed for Job Earn More Money Expected in Family American Dream Strongly Agree Somewhat Agree

7. Driving Uncertainty into Opportunity Fifteen Percent Fewer Parents are Worried this Year Funds Will Deplete Before College Completion

8. Driving Uncertainty into Opportunity High Levels of Confidence that Student will Achieve Expected Degree

9. Driving Uncertainty into Opportunity Cost-Consciousness

10. Driving Uncertainty into Opportunity Families Work at Containing College Costs Spending has leveled off Families continue to eliminate certain colleges due to cost – 79% attend college in state 82% of families—the highest since the study began—filed the FAFSA 96% of families took at least one action to make college more affordable

11. Driving Uncertainty into Opportunity Average Amount Spent on College, By Income, Year-Over-Year For the purposes of this study, low-income families have been defined as those with an annual household income of less than $35,000, middle-income are families with an annual income from $35,000 up to $100,000, and high-income families are those with an annual income of $100,000 or more.

12. Driving Uncertainty into Opportunity Average Amount Spent on College, By School Type, Year-Over-Year

13. Driving Uncertainty into Opportunity Cumulative Elimination of Colleges Based on Cost, Year-Over-Year

14. Driving Uncertainty into Opportunity Completion of FAFSA by Grade Level, Year-Over-Year

15. Driving Uncertainty into Opportunity Affordable Actions **Among students not living at home *Among non-freshmen

16. Driving Uncertainty into Opportunity Differences in Affordable Actions Taken by School Type

17. Driving Uncertainty into Opportunity Funding Sources and Share

18. Driving Uncertainty into Opportunity Trends in Funding Parent out-of-pocket contributions pay a smaller share – More families took advantage of dedicated college plan savings Grants and scholarships are filling the void left by parents Borrowing share has stabilized

19. Driving Uncertainty into Opportunity How the Typical Family Pays for College, Funding Source Share

20. Driving Uncertainty into Opportunity How the Typical Family Pays for College, Year-Over-Year

21. Driving Uncertainty into Opportunity How the Typical Family Pays for College, by School Type

22. Driving Uncertainty into Opportunity Percentage of Families Using Each Source Type, Year-Over-Year

23. Driving Uncertainty into Opportunity Use of Grants and Scholarships, by School Type

24. Driving Uncertainty into Opportunity Student Use of Borrowed Funds, by Grade Level, Year-Over-Year

25. Driving Uncertainty into Opportunity Proportion Using Federal and Private Student Loans

26. Driving Uncertainty into Opportunity Planning to Pay for College

27. Driving Uncertainty into Opportunity Planning for College Costs is a Challenge Most families don’t have a plan for paying for all years of college when they start Amount paid for college and future earnings are not aligned proportionately by major course of study Parent savings become scarcer as students advance through college Families aren’t prepared for the ‘unexpected’

28. Driving Uncertainty into Opportunity Had a Plan to Pay for All Years Prior to Enrolling

29. Driving Uncertainty into Opportunity Comparing Average Cost of College and Starting Salary by Major, Overlaid with Proportion of College Costs Paid by Borrowing 30% 13%

30. Driving Uncertainty into Opportunity Parent Personal Contributions by Grade Level

31. Driving Uncertainty into Opportunity Role of Savings 17% of families used parent savings from dedicated college savings plans/529s 5% used retirement savings 11% used parent savings from other types of investments 27% of families used student savings

32. Driving Uncertainty into Opportunity Planning Resources Used

33. Driving Uncertainty into Opportunity Unexpected Expenses 2 in five families report unexpected expenses – Most prevalent: books, supplies and equipment More than half of families have no financial contingency plan Confidence in time to degree not aligned with national averages: 92% enrolled in BA program believe they will achieve it in 5 years or fewer (vs. just over 61%)

34. Driving Uncertainty into Opportunity

35. The information contained in this presentation is not comprehensive, is subject to constant change, and therefore should serve only as general, background information for further investigation and study related to the subject matter and the specific factual circumstances being considered or evaluated. Nothing in this presentation constitutes or is designed to constitute legal advice.