How families from different income levels pay for college

by Grace

A report from Sallie Mae shows how families from different income levels have been paying for college over the last five years.


HOW THE TYPICAL FAMILY PAYS FOR COLLEGE, AVERAGE AMOUNT PAID FROM EACH SOURCE, YEAR-OVER-YEAR *

LOW-INCOME FAMILY

20130808.COCHowFamiliesPayLow2


MIDDLE-INCOME FAMILY

20130808.COCHowFamiliesPayMid2


HIGH-INCOME FAMILY

20130808.COCHowFamiliesPayHigh2

20130808.COCHowFamiliesPayLegend1

High-income families have cut down on their college spending.
Overall, parents are contributing less toward their children’s college education, but from these charts it’s clear the decline has mainly occurred among higher income families.  Over the last five years, parent contributions have actually increased 43% for low-income families while decreasing 10% for high-income families.

Low-income families receive more grants.
Even with the recent rise in merit aid
, lower-income families continue to received relatively generous amounts of grant and scholarship awards.

For the purposes of this study, low-income families have been defined as those with an annual household income of less than $35,000, middle-income are families with an annual income from $35,000 to less than $100,000, and high-income families are those with an annual income of $100,000 or more.

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4 Comments to “How families from different income levels pay for college”

  1. These figures confirm for me that merit aid is not on the rise (as you have previously claimed). Aid (grants and scholarships) are shrinking across the board, and merit aid is shrinking fastest. I think that much of the remaining “merit aid” is actually athletic scholarships, which have little to do with academic merit.

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  2. What is the source for the claim that merit aid in decreasing?

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  3. I guess a more accurate statement is that “merit” as a basis for determining non-need aid is shrinking: See for example, https://chronicle.com/article/Too-Much-Merit-Aid-Requires/137365/

    I’ve also been looking more at public universities than private ones—the trends seem to be going in opposite directions in private and public schools:
    http://www.usnews.com/education/articles/2010/08/23/6-reasons-private-colleges-are-awarding-more-merit-scholarships

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  4. “in 2011 found that nearly 20 percent of full-time students at four-year institutions who were receiving “merit” aid had entered college with a combined SAT score below 700. Forty-five percent had scored below 1000.”

    Very interesting ChronHIgherEd editorial. However, I would point out that many so-called merit awards take financial need into account. That’s what I’ve found in my reading and in my personal experience. So I suspect that many of these low-scoring students are being recruited based on low income. I find it hard to believe very many “stupid sons and daughters of the rich” are receiving substantial financial aid. If that’s the case, I know a few families who would be very interested in these offers. 🙂

     In reviewing college merit aid policies I have seen many instances of “hybrid” aid, where schools make it clear that both financial need and merit are considered.   However, I have not been alone in wondering if some colleges also take financial need into account when dispensing what they label as merit aid while never disclosing this significant fact to families.  It seems that the University of Rochester may have given us an example of this covert and confusing practice.

    Family income matters for ‘merit’ awards at the University of Rochester

    Psst – one of Duke’s so-called merit scholarships is actually need-based

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