By ANN CARRNS
About half of college students lived at home in the most recent academic year to cut education costs, an increase over the last two years, according to a new study from Sallie Mae, the student loan giant.
This increase is largely driven by students from more affluent families, those with incomes of $100,000 or more, the study found. Students from lower- and moderate-income families have typically lived at home for at least part of their college career. But more difficult economic times, and the increasing cost of a college degree, are prompting students from better-off families to live with their parents, too.
During the academic year ended in spring of 2012, almost half of students from high-income families lived at home, compared with about one-quarter two years ago.
That’s one reason the average amount families spent on college declined by 5 percent in 2012, to $20,902 the second consecutive annual decline found by the study.
Families also were more likely to eliminate certain colleges from consideration because of cost earlier in the selection process, the study found.
“Families are being more cost-conscious,” said Sarah Ducich, senior vice president for public policy at Sallie Mae. “They’re trying to find ways to spend less.”
The fifth annual Sallie Mae study, “How America Pays for College,” is based on interviews by the research firm Ipsos with undergraduates 18 to 24 years old and parents of undergraduates. While parents still shoulder much of the financial burden for their children’s college education, they are paying less. In the most recent year, parents paid slightly over a quarter of college costs from their savings and current income down from about three-eighths in 2010.
To offset the shortfall from diminishing parent contributions, students shouldered a larger share of college costs from their own savings and through the borrowing of federal student loans.
Despite the higher sensitivity to cost, however, the study found that fewer than half of families had a plan for paying for college before enrollment. That suggests much more needs to be done to help educate students and families about planning financially for college, Ms. Ducich said. “The worse thing is to not have a plan, go for a couple of years, then run out of money and not finish,” she said. Such students end up with debt, but no beneficial economic impact from having a college degree.
Are you contributing less to your child’s college education? Is your child planning to live at home while in college?
Source: New York Times