By Carl Azuz, CNN
(CNN) – The U.S. economy is tightening its grip on Americans’ options when it comes to paying for college.
And while parents proportionally contribute the most money toward an undergraduate’s degree, the amount they’re contributing has dropped dramatically in recent years.
The information was revealed in Sallie Mae’s National Study of College Students and Parents, which was conducted by Ipsos and found that Americans are relying on a variety of sources for college funding.
For the 2011 – 2012 academic year, the study found that parent and student income and savings combined to make up 40 percent of the total cost of college.
Borrowing by students and parents made up 27 percent. Contributions from relatives and friends added up to 4 percent.
But grants and scholarships made up the single biggest piece of the pie at 29 percent. And what may raise some concern among the nation’s college hopeful is a recent drop in the proportion of families that got scholarship money.
In 2011, 45 percent of American families received some form of scholarship to help with college costs. A year later, that number dropped to 35 percent.
The study cited shrinking endowments and smaller budgets as possible reasons why colleges are able to provide less assistance in the form of scholarships.
But Americans have become increasingly dependent on assistance to foot the bill. From their income and savings, American parents reduced their spending by 11 percent from last year – and by 32 percent from two years ago.
Families’ need to save money has extended to school and living choices as well. Enrollment at community colleges, which typically cost less than state universities, increased by 6 percent over the previous year.
More than half of America’s students are living at home rather than staying on or near campus, and 50 percent of those students who work are spending more hours doing it.
Despite the challenges, there's still a strong desire for higher education. When asked whether a college degree is an investment in their future, a vast majority (83 percent) of college students and parents strongly agreed.
Majorities also felt that a college education is needed now more than ever and that it’s a clear step toward earning more money.
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if you're illegal, you get instate tuition in California. So...become illegal
The real problem is that while all undergraduate degrees cost the same (approximately), they do not share the same practical value. I don't understand why this huge point is so easily overlooked. Spending 200k on an undergraduate degree for math, science, engineering, physics, medicine is a good investment. It always will be because these are skills that will always be needed.
On the other hand, 200k for a bachelor's in phycology, art or journalism is money better spent at the roulette wheel in Vegas. At least there you have a good chance to earn it back...
Parents need ipads and flat screen tv's. There's just not enough money left over for college.
"Parents need ipads and flat screen tv's. There's just not enough money left over for college."
We have about $3000 worth of electronics in our home. My daughter's first year of college will cost $21,000.
In my opinion the reason why tuition has risen as fast as health care is because the federal government has stepped in and guaranteed whatever the cost, students can pay through loans. If people stopped going to college because it was too expensive they would be forced to figure out a way to drop tuition. Universities are extremely bloated and unlike corporations are not nearly as efficent. For example the University of Michigan where i went to has 18400 administrative staff to support 42716 students. The tuitions of three students have to contribute enough to support one staff member. Then there are 6150 academic staff. You would think this would call for small class sizes. But as anyone who has gone to a public university knows many members of an academic staff do not even bother teaching classes. They are there it drum up researsh. Nowthe researchers have to drum up grants. But I doubt that grants are ever completely self sustaining.
The university system is ultimately a very expensive certification program. Like any certfication it does not mean you know anything useful, just that you know how to take a test. I personally believe an ambitious self motivated person can learn as much using the internet. It will be interesting to see how online education breaks the stranglehold that the entire education system has.
If anyone's wondering the picture above the story is UCLA. Tuition there is about 14k per year, depending if you do or do not
already have health insurance. Though when you factor in everything else you'll need, the cost is about 25-30k. The price has gone up around 50% in the past 4 years. Because college is an ill defined long term investment, it's always the first to be cut in a recession.
Costs of education are appropriately paid for with loans against future earnings, to ensure alignment between the two.
Blue-collar parents paying for a white-collar education for their children are at best idiotic.
What's the point? A college education isn't worth what it used to be, anyway. In another twenty years, who knows? My suggestion to those who cannot afford to swim with the mainstream: Spend your time reading, and questioning what you have read.
the cash for college is in the same place it was when I was 16 – at the other end of the paycheck I worked my butt off to get.
Can not tell you how much I shelled out for College. Horrific amounts.. and I was at a public university! But my tuition bill was always around 5k per semester.
Where's the cash for college? My nephews asked me this question – thinking that because of my high income and no debt, that I'd be paying their way. No chance. I paid for my college education – undergraduate and graduate – by working several jobs, living within my means and a few private student loans – all paid on time and without default.
THAT'S where the money is, folks. Not handouts, bailouts, bankruptcy or other welfare-funded nonsense. Education is a privilege. It is attainable – with hard work and determination.
Your a smarter man than me. My first took my savings, my second child took my retirement plan. My third is taking a my current income and whatever else she can. Frankly, despite the fact at 50, 54 by the time I am done, and wil have no money really doesn't bother me, I know I gave and did the best I could for my kids education. Hopefully some day they may appreciate it. But if not, at least i did the best I could for them.
You gave it – they didn't earn it – you will see the difference, and it won't be pretty.
You're so special!
Yes of course...a degree is not required for success. But every company I've ever worked for made it a requirement to apply for a position.
A former dean/provost wrote an interesting e-single about the costs, actual value, and pitfalls of higher ed today. A good read–watered down curriculum and rising costs: http://goo.gl/iGxIJ
I read an article a couple of days ago that in 2050s, the majority people on earth with bachelor degrees and up will come from China, India and some growing number from Indonesia and other developing countries. Reading the statements from Valerie, Moncada and Tim, who are not passionate enough on higher education, that article seems telling the truth.
AHHH...you know nothing about me, OR my education level. I am currently putting BOTH my sons through college. Shame on you for being so judgmental when I simply asked a question.
While I COMPLETELY agree that education is a GOOD thing, I believe that we are brainwashed into believing it's the ONLY way, as higher learning is BIG BUSINESS. I am eager to see what everyone else thinks though.
I hated when my school actually made it seem that the only way to succeed in life was to attend collage while in my mind I knew (with the connections my family has) that I could start a business whenever I wanted to and make a fortune without going to collage.
College* and some people who would like to go to college but cant because of money get screwed. I joined the navy and will have to use my GI Bill to attend as I recieved no help from my parents.
Wow Guy or Girl,
Can you toot your horn just a little louder? It sounds like the lazy route is certainly right for you!
Go get em' tiger!