(StatePoint) The way families pay for college is a good indicator of how much planning takes place before the first tuition bill arrives. A new study by Sallie Mae suggests that while families are feeling confident in their decision making, nearly 40 percent do not have a plan to pay for college.

Last year, family income and savings covered 47 percent of all college expenses, according to “How America Pays for College 2018,” the national study from Sallie Mae — the nation’s saving, planning, and paying for college company — and Ipsos, an independent global market research company.

The annual report examines how families pay for college, how much they spent, and how they made their funding decisions. The average amount spent on college in 2017-18 was $26,458.

While income and savings cover the largest portion of college costs, scholarships and grants cover 28 percent of college costs, and students and parents use loans to account for 24 percent of college costs. Extended family and friends paid an additional 2 percent of college costs.

While no single resource is used by all families, the most prevalent college funding sources — scholarships, grants, and parent income — are each used by about three in five families, with scholarships being the single most-used resource. In addition, 57 percent of families used scholarships last year, paying for almost a fifth of total college costs. Unfortunately, about a third of families don’t even apply for scholarship opportunities.

More than half of families, 53 percent, borrowed money to help pay for college last year and two-thirds of these families said they had always planned to borrow to pay for college. When it comes to planning to repay loans, however, 39 percent of families say they haven’t researched any repayment topics.

“It’s gratifying that families are so confident in the financial decisions they make regarding paying for college,” says Raymond J. Quinlan, chairman and CEO, Sallie Mae. “Still, there’s more work to do to equip families with the tools and information that will help them manage education expenses, whether it be applying for financial aid earlier in the process or taking steps to minimize student loan financing costs.”

When it comes to completing the Free Application for Federal Student Aid, (FAFSA), three-quarters of families report filing the form last year. However, the majority of them are not taking advantage of the earlier availability of the form: 69 percent of families are waiting until January or later to complete the FAFSA, which is now available on Oct. 1, and are potentially missing out on aid that’s awarded first-come, first-served.

The complete report and other resources are available at SallieMae.com/HowAmericaPaysForCollege. To join the conversation, use #HowAmericaPays. For more information, or to start your plan to pay for college, visit SallieMae.com.

Experts say that with the right tools and knowledge, families can develop a smart strategy for paying for college.

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PHOTO CAPTION:  Saving For College