Middle- and upper-class families opted for cheaper schools and more financial aid to send their children to college this year.
Overall, families spent less on college for the 2010-2011 school year and grants and scholarships accounted for an increased share of the costs, according to student-lender Sallie Mae’s study of more than 1,600 undergraduate students and parents. The trends were more pronounced among middle- and upper-class families that were vigilant in pursuing financial aid and choosing cheaper colleges during a weak economic recovery.
"Notably, high-income families pulled back from their 2010 levels of spending, with a sharp decline in how much parents pay from income and savings," the report said. “Middle-income families utilized the substantially increased availability of grants and scholarships, and simultaneously reduced their contributions towards the cost of college from parent income and savings.”
Scholarships and grants covered a third of families’ college costs in 2011, up 10 percentage points from a year earlier.
The proportion of families using grants also rose, jumping to 46% in 2011 from 30% in 2010. That’s partly because of an expansion of the Pell Grant program. Most of the rise came from middle-income families earning between $35,000 and $100,000. Grant usage increased 19 percentage points to 49%. Among those families earning $100,000 or more, the share using grants more than doubled to 26% from 12% a year earlier. The share of low-income households (earning less than $35,000) using grants was mostly flat.
Families, on average, paid less for college this year. Costs fell 9% to $21,889. The biggest shift came from high-income families, which paid 18% less for college this year. Middle-class families also cut their spending, whereas low-income families paid more. The average cost of college for low-income households rose more than 14% to $19,888.
“Over the past four years, families have shifted away from four-year public schools towards less-expensive two-year public schools,” according to the report. “This might help to explain how middle- and higher-income families were able to reduce their contributions from income and savings and decrease the overall amount they paid for college.” Low-income families, meanwhile, had already made the shift toward two-year colleges in previous years.
While the rising cost of college and the economic downturn have sparked debate over the value of a college education, those who took the survey largely agreed higher education was worth it.
Some 70% of students and parents agreed “college is essential for earning more over the course of the student’s future career,” up from 59% who said the same a year earlier.
Households are skittish about taking on more debt, though. Some 51% of parents said they would rather borrow to pay for college than not send their children, down from 59% who said the same a year ago.