By MARY PATRICK
The new How America Pays for College 2013 report from Salle Mae, released in July, shows that the cost of college is shifting from parents to sources of “free money” such as scholarships and grants.
The amount of money contributed by parents from income and savings to college education has dropped 9 percentage points from 2010 to 2013, from 36% to 27% of total tuition cost, according to the Sallie Mae report.
“Free money” such as high school scholarships and grants now pay for 30% of college costs, up from 25% four years ago.
The Sallie Mae report, based on a study by Ipsos Public Affairs, suggested that the change “finds that families are adjusting to a new post-recession reality to pay for college.”
“Since 2010, families have reduced how much they spend on college, with parents’ contributions in particular seeing a significant decline,” the reported stated. “The use of grants and scholarships, now the largest contributor, and student borrowing have increased to make up for some of this deficit.”
The study, now in its sixth year, found that funding for college came from the following sources: grants and scholarships (30%), parent spending from income and savings (27%), student borrowing (18%), student income and savings (11%), parent borrowing (9%) and relatives and friends (5%).
“The post-recession reality is (parents) don’t have the income and savings,” Sarah Ducich, senior vice president of public policy at Sallie Mae, told USA Today. “It’s not that they’re not willing to stretch. It’s that they don’t think they have the money to do that.”
The study also found that parents still place a high value on attending college, with 85% of the parents in the survey saying that college is an investment in their child’s future.
“Despite these difficult economic times, American families’ belief in the value of college has been unwavering, the vast majority of families believing that college is an investment in the future,” the report stated. “In 2013, the data show that parents in particular are slightly more optimistic than in previous years about the value of college and their ability to pay for it.”
The study found the cost of college has actually gone down since 2010, when families were paying more than $24,000 a year on average to attend a university. In the 2012-2013 academic year, the average spending was $21,178.
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