How America Pays for College: Seeking all available funds as parents are tapped out
Sallie Mae‘s annual report “How America Pays for College” was released Tuesday.
The quote that got my attention in the AP article is this:
“Parents are willing to stretch themselves,” Sarah Ducich, Sallie Mae’s senior vice president for public policy, said. “It’s not that they’re willing to pay. It’s that their income is not keeping up.”
The snippets from the research study that I found of interest include:
“How America Pays for College” shows that one outcome of the recession and the slow economic recovery is the stress that it has placed on parents’ ability to pay for college from their income and savings. Parents’ average out-of-pocket spending has decreased by 35 percent since 2010, from $8,752 to $5,727.
The reduction is parents’ spending on college has occurred at a greater rate than the overall decline in the total spending of college.
The report is also finding:
- Parent borrowing is on the decline while student borrowing is on the increase. This fits in with what I heard a year ago when I worked on a student debt special report.
- Scholarships and grants are starting to pick up in terms of what share of the total college costs they cover.
- The majority of families who receive scholarships are reporting that 61 percent of those awards came directly from the colleges. The dollar amounts of those awards also were higher than from state-based scholarships or from community and non-profit groups. This fits in with what my daughter noticed when she was in undergrad from 2007-2011.
- About 60 percent of families said they have used a scholarship search Web site to look for scholarship leads. This is despite the fact that the majority of the scholarship awards that are listed in our newspaper were publicized to students through other directions such as a high school counselors’ office; and the above statistic that shows the majority of scholarship funds are issued by the colleges directly.
- 92 percent of families told Sallie Mae that they believe it will take five years or less to complete a bachelor’s degree. As I’ve reported in the past, the Complete College America research has found it is taking full-time students 4.7 years to complete that level. Do remember that college expenses are paid by each semester or course attempted, rather than per degree completed.
From the Monroe on a Budget archives: