Parents are covering an ever smaller portion of the college tuition bill for their kids. As the average tuition charged by schools around the country rises, students themselves are taking on more of the tuition burden, looking to make up the difference with work, loans and financial aid offered both by the school and the federal government.
These conclusions were a result of the 2013 edition of Salle Mae National Study called “How America Pays for College.” One of the most startling findings was that parental involvement decreased by nearly 10 percentage points – from 36% in 2010 to 27% in 2013. According to Jack Martin, spokesman for the University of Kansas, a large part of the change could be attributed to the recession of 2009 which brought with it lower household incomes.
“If you look at family median income, it dropped during the Great Recession and is only now starting to reach pre-recession levels again,” Martin said. “There’s been an increase in student tuition as [the] state’s funding has decreased too, also correlated to the recession, so that puts the price of education on to students and families where previously it would have been covered by state funding.”
According to the National Center for Education Statistics, students at the University have required more Federal student loan money than in years past. The number of students who received loans rose from 40 percent in 2008 to 45 percent in 2011; something Martin said the University is trying to compensate for.
The cost of education is a serious issue not just for those who pay for it, but even for those who set the prices. Martin realizes that with these uncertain economic times, schools that depend on tuition revenue to survive are going to struggle as well. To alleviate some of those worries, Martin explains that his school has now transitioned to a four-year renewable scholarships that will provide some stability for students and keep them from wondering in the spring of each year if they’ll need to pull out of their classes and get a job to pay tuition in the fall.
The study also found that some of the decrease in parent funding was made up for by “free money” like scholarships and grants, which now covers 30 percent of college costs, a five percent increase since 2010.
Even with more scholarships and grants, outstanding student loans are still reaching unprecedented numbers. According to the Consumer Financial Protection Bureau, student loan debt in the U.S. is approaching $1.2 trillion, which makes it the second highest consumer debt in the U.S.