The media template for stories about higher education costs has been that ever higher charges for tuition, fees, room and board are making it increasingly more difficult for students and their parents to finance college.
In fact, I wrote about it back in June when the WVU Board of Governors approved higher tuition, “Parents who attended WVU and are now sending their children to their alma mater are in for sticker shock.”
Indeed, college costs are rising. The College Board Advisory and Policy Center reports that over the last 30 years, tuition and fees for in-state students at four-year public institutions have increased 257 percent, from $2,423 to $8,655.
However, a new report by Sallie Mae, the largest financial services company specializing in education, suggests that parents, students and colleges are all adjusting to the increases.
Perhaps the most surprising finding in How America Pays for College runs counter to the current conventional wisdom. Spending on college in the last two academic years has dropped 17 percent from a high in 2010, from $24,097 to $21,178.
That’s because students, their families and colleges have figured out a variety of ways to cope with college costs. The Sallie Mae report found:
–57 percent of families reported the student lived at home or with relatives in the last academic year, up from 51 percent the previous year and 44 percent in 2011.
–Half of all students who work to help pay for their college increased their hours in 2013 and one-quarter of students raised their course load to graduate in less time.
–67 percent of families eliminated colleges based on cost, so students and parents are shopping around for the best higher education bargain.
–Colleges and universities are making more aid money available and more students are taking advantage of it. Grants and scholarships paid for 30 percent of college costs for the average family in 2013, up from 25 percent before the recession.
–More families are planning ahead. 17 percent of families used 527 college savings plans in the last academic year, higher than any other year.
It does appear, however, that more of the burden of paying for college is falling on the student.
The Sallie Mae report says while parents’ annual average out-of-pocket spending has dropped 35 percent since 2010 to $5,727, student borrowing is rising. The amount borrowed by students last year through federal loans was $8,815.
Still, grants and scholarships make up the largest share of the cost of going to college (30%) while student and parent borrowing, along with parent income and savings, each comprise 27 percent.
Naturally, most families worry about paying for college, but not as much as you might think. During the recession, half of parents were extremely worried about rising tuition, but that number is now down to 28 percent.
Sallie Mae found that families still believe college is an important investment in the future, and ever-ingenious Americans are figuring out ways to pay for it.