Families finding ways to cut college costs
BY FRANCINE KNOWLES Business Reporter email@example.com July 16, 2012 7:42PM
The percent of families opting to send their kids to less expensive colleges to save money is at the highest level in five years, according to an annual survey from student lender Sallie Mae that also revealed families are focused on finding more ways to save money.
In the survey, which looked at the 2011-2012 school year, 69 percent of families responding eliminated colleges based on costs, up from 64 percent a year earlier and up from 56 percent in the 2007-2008 school-year.
“I think it’s in response to economic times,” said Sallie Mae spokeswoman Patricia Nash Christel. “Families are more cost conscious now than they were just a few years ago as they go through the decision for what college to attend, as they research which colleges…They apply…they receive their financial aid package, at each step along the way, we see that they’re being more cost conscious.”
Among some of the most common ways families are cutting costs are by having students live at home — 51 percent, up from 44 percent. Most of that increase was driven by high-income families, Sallie Mae said.
Other common cost saving strategies included:
♦Students reduced spending — 66 percent
♦Students added a roommate — 55 percent
♦Parents reduced spending — 50 percent
Parents are shelling out less dough to help pay for their kids’ college education. The 2012 survey shows parents spent an average of $5,955 from their income and savings, down 11 percent from $6,664 a year earlier and 32 percent lower than the 2009-2010 school year, when that peaked at $8,752.
Parents’ income and savings paid for 28 percent of college costs, this year’s survey showed. That was slightly below last year’s 30 percent, and down from 37 percent in the 2010 survey.
The percent of students using federal student loans rose to 34 percent in 2012, up from 30 percent in 2011 and from 25 percent in 2009.
The survey also found more students opting for community college — 29 percent, up from 28 percent last year and up from 23 percent two years ago.
Not as many parents said they’d rather borrow than not send their child to college — 47 percent, vs. 51 percent in 2011.
The survey revealed fewer students are carrying credit cards since the Credit Card Act went into effect more than two years ago. The law placed restrictions on the marketing and issuance of credit cards to people under age 21. Overall, 35 percent of undergraduates carried a credit card, down from 42 percent in 2010. The average balance for those with a card was $755. The median balance was $196.
The survey was conducted by Ipsos Public Affairs.