Good news, mums and Dads: kids are finding other ways to pay for college these days.
A new study by student lender Sallie Mae shows “free money”, such as scholarships, grants and financial aid have become the biggest source of college funding.
Back in 2009, scholarships and grants accounted for just 25% of college funding. That figure is up 5 points today, accounting for 30% of college costs, according to the report, “How America Pays for College 2013.”
The trend is likely giving cash-strapped parents a much-needed break. Students used to rely on mum and dad for more than two-thirds of college costs in 2010. Now, parents make up just 27% of funding.
Families still see the value in college education (85% of parents and 95% of student say it’s a worthy investment) and they’ve taken great pains to adapt to rising tuition and fee costs across the country.
We’ve culled the entire report and picked out charts that paint the clearest picture of how Americans are affording higher education these days.
As a whole, annual college spending has decreased from its peak of $24,000 in 2010 to about $21,000 today. That’s not to say it’s gotten cheaper (it hasn’t), but families are doing a lot more research to eliminate schools based on price tags. In fact, two-thirds admitted to passing over potential colleges due to cost.
Over the last couple of years, there’s also been a real push for scholarships and financial aid to help foot the bill.
The trend is evident even among wealthy families. High-income students relied on the Bank of mum and Dad for more than half of college funding at the onset of the recession. Today, they fund about 40%.
Student loans and financial aid are still the biggest sources of college funding for low-income students. They’re also twice as likely as high-income co-eds to rely on friends and relatives for help.
Thanks in part to the use of grants and scholarships, middle-income families are spending as much on college today as they were at the peak of college spending in 2010. But high- and low-income families have both decreased their spending. The average amount low-income paid for college in 2013 was $18,034, a decline of 9 per cent since 2011.
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