Grants and scholarships are taking the lead role in paying college bills, surpassing the traditional role parents have played in helping cover costs, according to a report from loan giant Sallie Mae.
The study is only in its sixth year, so it gives little indication of changes over time. But it does give a detailed picture of the students and parents who spent the Great Recession paying for college. Last year, the average family turned to grants and scholarships to cover 30 percent of college costs. Parents’ income and savings covered 27 percent of the bills and student borrowing covered 18 percent. Parents covered 37 percent of the bill as recently as 2010.
The annual survey of student financial aid found students earned about $6,300 in grants and scholarships to pay for college costs, taking the top spots from parents. Student loans were the third most common source for covering courses, housing, and books. Of students who borrowed, the average took out $8,815 in federal loans, a significant increase since 2008. But the average student only financed 18 percent of his schooling through borrowing.
Almost all families, the study said, “took at least one action to make college more affordable, such as increasing work hours, having the student live at home, or filing education tax credits.” The report found 57 percent of families said students lived at home or with relatives, up from 41 percent last year and 44 percent in 2011. One-fifth of parents added work hours to pay for college and half of students increased their work hours too.
Families spent about $21,000 on schooling during 2012, down from a peak of $24,000 in 2010. The actual cost to attend school, however, continues to rise. The tuition sticker price at public, four-year colleges grew 27 percent beyond overall inflation during the last five years, according to the latest figures from a separate study from the College Board.
Sallie Mae and Ipsos conducted the telephone poll in April with 1,802 parents of undergraduate students and 800 18- to 24-year-old undergraduate students. The survey has a margin of error of plus or minus 2.5 percentage points.
Other notable facts in the detailed study include:
- Students in social sciences and engineering paid the most for schooling last year. Engineers can expect one of the highest starting salaries, while those in social sciences can expect one of the lowest.
- African-American families decreased spending on schooling by 10 percent. One reason for the decline: only 14 percent of African-American students enrolled in a four-year private school, compared to 30 percent last year.
- About one-fifth of students said they changed majors to fields that were expected to be more marketable after graduation.
- Only 30 percent of students reported having a credit card last year, down from 42 percent two years ago. Numbers have steadily declined since the CARD Act of 2009 made it harder for banks to take advantage of the cash-strapped and high-debt demographic.