WASHINGTON – Parents are picking up less of their children’s college costs while grants and scholarships now have the top role in paying the bills, according to a report released today by loan giant Sallie Mae.
Since the recession, more college-bound students have eliminated schools from their searches based on costs and have relied less on their parents once they get to campus, the report found. Worries such as tuition increases and job losses seem to have faded as the economy has improved, yet parents and students still make decisions on schools, majors and work schedules based on the price tag.
“We have moved into a post-recession reality in how people pay for college,” said Sarah Ducich, Sallie Mae’s senior vice president for public policy.
College spending was about $21,000 during 2012, down from a peak of $24,000 in 2010, according to the Sallie Mae-Ipsos Public Affairs report.
The annual survey of student financial aid found students earned about $6,300 in grants and scholarships to pay for college costs, taking the top spots from parents. Student loans were the third most common source to pick up the bill for courses, housing and books.
The average student borrowed $8,815 in federal loans.
Last year, the average family turned to grants and scholarships to cover 30 percent of college costs. Parents’ income and savings covered 27 percent of the bill and student borrowing covered 18 percent.
“Parents are willing to stretch themselves,” Ducich said “It’s not that they’re unwilling to pay. It’s that their income is not keeping up.”
Parents’ enthusiasm for college has not shriveled, though. The survey found 85 percent of parents saw college bills as an investment in their children’s future.
“We’re in a new normal where big ticket items like college, families will pay for them but won’t stress about them too much,” said Cliff Young, managing director at Ipsos.
One-fifth of parents added work hours to pay for college and half of students increased their work hours, too. The report found 57 percent of families said students were living at home or with relatives, up from 41 percent last year and 44 percent in 2011.
Among other strategies employed to deal with costs:
• One-fifth of students from low-income families chose to transfer to less-expensive schools.
• About one-fifth of students also said they changed majors to fields expected to be more marketable.
• In all, 67 percent of students and their families eliminated colleges during the application process because of costs, up from 58 percent in 2008.
Tuition at public four-year colleges is up 27 percent beyond inflation over five years, says the College Board.