Parents cut down on college spending while students take on more of the costs

by Grace

College students are borrowing a higher share of costs as their parents cut back on college spending.

A study released Monday by the country’s largest student lender shows parents spending less on college costs and students shouldering more of the burden, a trend that demonstrates how families are strategizing to cut college expenses….

Parents spent an average $5,955 on college from their income and savings, results showed. That was down from $6,664 a year earlier and $8,752 the year before. They also borrowed slightly more — $1,832 compared with $1,573 in the 2010-11 survey — although that was still less than they did two years ago.

Students took on more of the burden by digging deeper into their own funds. They spent an average $2,555 on college from their savings and income in the last academic year, up from $1,944 the previous year. But their spending wasn’t enough to make up for cutbacks by their parents.

All told, parents funded 37 percent of college costs through spending or borrowing, down from 47 percent two years ago. Students accounted for 30 percent; grants and scholarships footed 29 percent; and relatives and friends paid for 4 percent, according to the survey.

It looks as if reality has bumped up against the aspirations expressed by parents in this 2011 Pew Survey, Is College Worth It:

Given the rising cost of college, saving for a child’s education has become a daunting task for many parents. Being able to pay for a child’s education is an important long-term financial goal for most parents of school-aged children. Among all parents with at least one child under age 18, eight-in-ten say this is an extremely important (35%) or very important (45%) goal.

More students from upper-income families are commuting from home, foregoing the luxury of  going away to college.

Just over half of the students in the survey lived at home while they attended college this year, up almost 9 percent from a year ago. Most of that increase was accounted for by families with income of more than $100,000.

Community colleges are becoming a more popular option.

A shift toward two-year colleges also was evident for a second straight year, Sallie Mae said. Respondents included 29 percent who attended two-year public schools, up from 21 percent the previous year.

Related:  Families in New York’s Lower Hudson Valley adjust to rising college costs (Cost of College)

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2 Comments to “Parents cut down on college spending while students take on more of the costs”

  1. Yes! Inadequate retirement funding is a huge problem, yet so many families prioritize paying for college over retirement. They figure they still have time to save. It’s scary, and I see “death panels” or worse in our future. That sounds horrible, but I cannot see any other way. Well, maybe with a prosperous economy raising taxes will be more palatable than it is now.

  2. Regarding parents cutting back on paying for college, I’m happy if this is an indication of reorganizing priorities. But I think much of it is people are just running out of money.

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