A Sallie Mae Report entitled How America Pays for College 2013 brings to light some important changes occurring in the financing of education. Parents and students are finding new strategies to adjust to increases in cost which include opting out of dorms, applying for grants, working more hours, and cutting back on things that are not necessary. Despite the growing cost of education students and parents still believe in the power of education and the ability to afford a better life.
Even though a general trend of college costs has been increasing, over the last few years it has leveled out to $21,178 which is down from 2010. Yet parents and students are being more frugal and this could have some influence on the plateau and how long that plateau lasts. Wealthier families are spending a little more than middle class families while lower class families are pulling back on their expenses while attending school.
How Students Are Paying for College:
Student Borrowing 18%
Parent Borrowing 9%
Parent Income & Savings 27%
Grants and Scholarships 30%
Relatives & Friends 5%
Student Income and Savings 11%
Parental spending on college declined a significant 35% from 2010 leaving children to find alternatives. On a positive note the 529 educational plans have been increasing for longer term savings. The information may indicate that the ability to pay cash for education is declining and there is a shift toward longer-term saving plans. It does help indicate a level of adjustment and sophistication in decision making as a direct adjustment to the educational and economic market.
Parents from middle and upper class families were less worried about paying for their kid’s college. Lower income parents were still worried about the availability of financial aid, grants, and their incomes. The majority of people still see college as a way to work in an occupation they are interest in as well as the possibility of earning more money due to their educational achievements.
The report provides a strong overview of current educational perceptions and they methods people are using to pay for their college education. It is full of information, charts, and graphs. Americans are finding ways to work around the difficult costs and choices they have to make. The report, as well as other reports this year from other organizations, indicates there may be a large shake up in higher education in the years to come. Good or bad the people will continue to adjust and change.