Tuition snapshot: Parents, high-income families paying less for college
Could it be? Parents are shelling out less money for their kid’s college tuition, according to a new report from student loan servicer Sallie Mae. In 2012, parents paid $5,727 from their savings and income, compared to $8,752 in 2009. Colleges are picking up some of the slack with more grants and scholarships, which now cover 30 percent of tuition on average.
Before you break out the champagne, let’s explore those numbers. The Wall Street Journal points out parents may have reduced tuition payments because their incomes have not kept up with the cost of college. Meanwhile parents haven’t cut back on borrowing. At the same time, student borrowing has increased 4 percent as a share of funding since 2009.
Share of total cost of college the typical family paid from each source (2012-2013)
Now let’s take a look at how much families are paying for college. Tuition spending peaked in 2009, at $24,097 per year, but has leveled off since. However, the report notes there have been shifts among income levels. High income families have pulled back on tuition significantly, while low- and middle-income families’ spending has grown. As a result, the gap between high-income and middle-income families has shrunk dramatically, from 28 percent in 2010 to 7 percent in the last year.
Average amount paid for college by income level (2007-2013)
And finally, aside from leaning more on grants and scholarships, how are students saving money? By refusing the dorm. 57 percent of college students are living at home or with relatives, compared to just 43 percent three academic years ago.
Source: Sallie Mae, How America Pays for College 2013: A national study
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