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Parents Spending Less on College

Jul 16, 2012

Many families have had to cut back on college spending in the past year. They are choosing to send their children to less expensive schools and finding other ways to save money.

New findings in a survey by money lender Sallie Mae reveals the average amount spent by parents of
college students was reduced by 5% in the 2011-2012 school year. Decisions on where a student will attend college is now being based more on the amount of money the parents have to spend.

This study more than any other evidence shows just how deep the recession has cut into college education expenses. Families are being more cost conscious, saving more money, and spending less.

The survey, conducted for Sallie Mae by the Ipsos polling firm, was based on telephone interviews in April and May with 1,601 college undergraduates and parents.

Parents spent an average $5,955 on college from their income and savings, results showed. That was down from $6,664 a year earlier and $8,752 the year before. They also borrowed slightly more — $1,832 compared with $1,573 in the 2010-11 survey — although that was still less than they did two years ago.

Students took on more of the burden by digging deeper into their own funds. They spent an average $2,555 on college from their savings and income in the last academic year, up from $1,944 the previous year. But their spending wasn't enough to make up for cutbacks by their parents.

All told, parents funded 37 percent of college costs through spending or borrowing, down from 47 percent two years ago. Students accounted for 30 percent; grants and scholarships footed 29 percent; and relatives and friends paid for 4 percent, according to the survey.

"American families are frustrated by the cost but they're being creative and employing different solutions to make sure their students can go to college," said Ipsos pollster and managing director Clifford Young.

A shift toward two-year colleges also was evident for a second straight year, Salllie Mae said. Respondents included 29 percent who attended two-year public schools, up from 21 percent the previous year.

Got further questions? Catch me on twitter and DM me @529SavingsPlans or e-mail me at 529CollegePlans at Gmail.com. Want to be heard? Leave a reader comment below.

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