Parents putting less money toward college

As the weak economy continues to impact how Americans spend their money, parents are putting less toward their children’s college education than in previous years.

Parents put an average of $5,727 from their income and savings toward each child’s college costs in the 2012-2013 academic year. This is down more than a third from $8,752 in 2009-2010, according to “How America Pays for College,” student loan lender Sallie Mae’s annual report on college funding.

Scholarships, grants more important

To offset reduced parent spending for college, college students and  their parents are relying more on free money, such as grants and scholarships, to help pay for college.

For the average student, scholarships and grants account for 30% of a college costs, up from 25% four years ago. Meanwhile, parents now foot the bill for 27% of college expenses, down from 2010’s peak funding of 36%.

Families are also taking steps to make college expenses less of a burden on their families. 48% of parents and 60% of students said they reduced their spending in order to ease college costs.

Belief in the value of college remains

Despite parents’ reduced ability to pay for their children’s education, their belief in the importance of the college investment has not been shaken. In the study, 85% of parents strongly agreed that college was an investment in their child’s future, the highest in the last five years.

These statistics are quite telling. They show that parents are either less willing, or less able, to afford to put a large amount of money toward their children’s college expenses.

At the same time, the study demonstrates that parents and students are becoming more conscious of high college costs–which may force colleges to either lower their prices or offer more financial aid.

Getting the most financial aid possible is more important than ever

With parents spending less on college as college costs continue to climb, the average student’s need for financial aid is even greater.

It’s crucial for students to get the most financial aid possible in order to avoid having to borrow large sums to cover college costs. If you need help figuring out the best way to pay for college, give us a call at 1-888-234-3907 or send us a message.