Parents pull back on college spending with more students living at home and …

July 17, 2012 by admin
Filed under Choosing Lingerie

Spent on average $5,955 on college from their income and savings down from $6,664 a year earlier and $8,752 the year before
They borrowed $1,832 compared with $1,573 in the 2010-11 survey
Students themselves spent an average $2,555 on college from their savings and income in the last academic year, up from $1,944 the previous year
Just over half of the students in the
survey lived at home while they attended college this year, up almost 9
per cent from a year ago

By
Associated Press

PUBLISHED:

08:43 EST, 16 July 2012

|

UPDATED:

08:43 EST, 16 July 2012

Families have implemented more cost-saving strategies to cut college spending in the past academic year, choosing less expensive schools and finding more economical ways for students to attend.

More students also are living at home in order to help afford college, according to new survey results.

The findings are from an annual study released Monday by Sallie Mae, the country’s largest student lender, from its headquarters in Newark, Delaware.

Money saving: Parents are pulling back on the amount they spend on college

They show that the average amount spent on college by families responding to the survey declined by 5 per cent in the 2011-12 school year. More parents and students alike said they make their college decisions based on the cost they can afford to pay than in the previous four studies.

‘This really reflects the economic conditions that we see today,’ said Sarah Ducich, senior vice president at Sallie Mae. ‘We are seeing families make adjustments, saving more money and being more cost-conscious.’

The survey, conducted for Sallie Mae by the Ipsos polling firm, was based on telephone interviews in April and May with 1,601 college undergraduates and parents.

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.

Pricey: Students are picking up more of the tab as parental spending decreases

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

Just over half of the students in the survey lived at home while they attended college this year, up almost 9 per cent from a year ago.

Most of that increase was accounted for by families with income of more than $100,000.

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

‘American families are frustrated by the cost but they’re being creative and employing different solutions to make sure their students can go to college,’ said Ipsos pollster and managing director Clifford Young.

The survey also found a decline in credit card use among college undergrads since the Credit Card Act took effect 2½ years ago. That legislation barred those under age 21 from having credit cards without a qualified co-signer or proof of sufficient income to repay the debt.

Although few used them to pay for college costs, 35 per cent of students owned a credit card this academic year. That was down from 42 per cent in 2010, the first year the survey asked about credit cards. The median outstanding balance was $196.

SPENDING THEN…

Last year parents spent an average of $6,664 on college from income and savings.

They borrowed $1,573 to help with the cost.

They were helped out by students who used $1,944 from their savings and income to pay for college.

Just over 40% of students lived at home during college last year.

AND SAVING NOW

This year the average parental spend on college was $5,955.

Borrowing has gone up to an average of $1,832.

Students have increased their share of the cost, spending $2,555 from their pockets.

This year more than half have chosen to live with their parents.

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Fees have gone up 27 fold in real terms since the 1960s. At the Univeristy of Delaware in Newark (the same town as Sallie Mae HQ) only 26% of tuition fees are spent on academia, the rest is spent on sports and extra-curricular facilities to attract more students; ie $$$$.
In the UK fees are capped at $14,000 (including the top colleges Oxford, Cambridge etc.) Compare this to $38,000 for tier 1 US colleges.

- Iris, Usa, 17/7/2012 03:41

I’m one of the parents cutting back as much as possible. I was blessed that my son did well enough in high school to earn a scholarship from the state that covers some of the 4 year tuition. He’ll be attending community college 5 miles from our house. I feel it’s the best way to keep him focused and get prereqs for an engineering degree out of the way. After that I have to fork out the $ for the dorm(required) and higher tuition at the closest public university. I can’t let him take out student loans and have the burden at a young age.

- Ida Liketunoe, Jacksonville, Florida, 16/7/2012 23:53

I feel for the younger generation. If you spend a fortune and do attend college, what are the chances of you getting a job? Most manufacturing jobs are going to/have gone to China, whereas the technology jobs are in India. What’s left…Walmart?

- Tyler Durden, Paper Street, 16/7/2012 17:31

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