Study: Families are changing habits to deal with rising college costs
American families are changing the way they approach the financial obligations associated with giving their children a college education, according to a new study by Sallie Mae. The survey of 1,600 undergraduates and their parents found nearly all of the families took additional precautions to bring down costs for their students’ education.
“Once again, Americans have demonstrated they are smart and resourceful consumers determined, even in this economy, to attain higher education without breaking the family bank,” said Albert L. Lord, vice chairman and CEO of Sallie Mae.
The study, “How America Pays For College,” found that 90 percent of student respondents found college to be a strong investment in the future, up from 84 percent the previous year. Additionally, 70 percent of parents and students found college to be necessary in reaching career goals, which is up from 59 percent and 63 percent in 2010, respectively.
Because of this, families made strides to help their college-aged children attend school while also focusing on bringing down costs. The percentage of students receiving grants and scholarships jumped from 55 percent in the 2009-2010 school year to 67 percent the following academic year. The spike in such financial assistance was most prevalent among middle- to high-income families.
“It is not at all surprising that American families are increasingly cost-conscious, especially considering the severe economic crisis together with rising tuition costs,” said Clifford Young, lead author of the study and managing director of Ipsos Public Affairs. “Most strikingly, this all suggests the immutable nature of higher education as a core American value even while families cite increasingly practical reasons to pursue their college goals.”
The survey found that more families filled out the Free Application for Federal Student Aid (FAFSA) than any other year since the study began. Eighty percent of respondents applied in the 2011 report, while 72 percent filed in 2010. And once again, the largest gains were seen among those in the middle- to high-income brackets.
Parents took on the brunt of college costs, according to the survey, at 37 percent. In those instances, students took on one-quarter of the fiscal responsibility for their college educations. In one-third of respondent families, the students took on full responsibility for their college costs, paying for them mostly through federal student loans averaging just over $6,900. Nine percent of families used private funding sources.
