A college education is still very important for most people.
On Monday, the two groups released details about its latest national survey, finding that 83 percent of college students and parents strongly agree that higher education is an investment in the future.
The survey also revealed that today’s college students are paying a larger share of their college costs as their parents reduce their contributions. Four years ago students contributed 24 percent of the cost of their higher education; that figure is now at 30 percent. Parents are now contributing 37 percent of the total, down from 45 percent four years ago.
“Once again, we see that families recognize the value of a college education and that they are taking steps to keep college costs in line with their financial resources,” said Albert L. Lord, vice chairman and CEO, Sallie Mae, the nation’s No. 1 financial services company specializing in education. “Data confirms again and again that the investment carefully made significantly enhances the lives and livelihoods of those who complete their education.”
Saving money on college costs is the concern of parents and their children alike. The survey revealed that 69 percent of families eliminated college choices based on the cost of college. Additional savings were gained in other areas with an increased number of students living at home, living off campus but with a roommate to share costs, or by reducing overall spending. Families paid 5 percent less for college in 2012 than they did in 2011 as an increased number of students are starting out their higher education at low-cost community colleges.
Clifford Young, the principal author of the report and managing director for Ipsos Public Affairs was sanguine about the state of higher education and how people are meeting the cost challenge. Said Young, “This is really a tale of the resilient American family who still see the extreme value of a college education and are finding new and creative ways to pay for it.”
Although parental influence in higher education remains strong, students typically choose their college while their parents figure out ways to pay for it. More students than ever before have indicated that they are willing to extend themselves financially to ensure themselves of a college education, representing 61 percent of all students surveyed. That number is the highest it has been in the five years the survey has been conducted. Students are borrowing more money themselves while both grants and scholarships declined somewhat over the past year. Still, outside aid plays a significant role in helping students fund their college education these days.
Just over one in three students are taking out loans to pay for their education. Some 25 percent are taking out federal student loans, 1 percent are opting for private loans while 9 percent are funding their education with a mix of the two. Still, 70 percent of students and their parents agree that a college education is needed now more than ever with 69 percent expecting to earn more money because they have a college degree.
Lastly, credit cards, sometimes criticized for increasing student debt, are being carried by fewer students. Ownership has fallen for two consecutive years with 35 percent of college students carrying a credit card. The average outstanding balance is $755, but about one-third of students have no credit card balance whatsoever.
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