Lewis Diuguid

July 24, 2013

College remains important; financing it, however, has changed

Students and families creatively rely more on grants and scholarships to finance college.

The good news is students are becoming increasingly creative and resourceful as they make their way through college.

Grants and scholarships now are outdoing parents’ contributions in financing higher education, a report from Sallie Mae shows. As tuition rises and states cut back funding to colleges, students cleverly are picking colleges where they can get the most dough.

The annual survey by the loan giant shows that students picked up about $6,300 in grants and scholarships to cover college costs and took out $8,815 in federal loans. College spending per student was about $21,000 in 2012 compared with $24,000 in 2010, the Sallie Mae-Ipsos Public Affairs report said.

Parents’ savings and income covered 27 percent of the bill while student borrowing amounted to 18 percent of the cost of college. The Associated Press reports that a fifth of parents added work hours to pay for college, and half of the students increased their work hours.

The Sallie Mae report found that 57 percent of families said students were staying at home or with relatives, up from 41 percent last year and 44 percent in 2011.

Eighty-five percent of parents see college bills as an investment in their children’s future. That importance has not diminished even though savings, home equity and employment have after the Great Recession.

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