More Families Shunning Pricey Colleges

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Congress this week rolled back a student loan interest rate hike, but families have already been preparing for higher costs.

Sallie Mae‘s annual report on how families pay for college shows “a new cost consciousness since the recession.” Sixty-seven percent of families cross colleges off their child’s prospective list based on price, up nearly 10 percentage points from 2008. Here are the other most common cost-cutting measures:

  • Student spending less — 60 percent.
  • Student living at home — 57 percent.
  • Student working more — 47 percent.
  • Parent spending less — 47 percent.
  • Accelerating coursework — 27 percent.
  • Parent working more — 20 percent.

We’ve got some college cost-cutting strategies of our own in the video below. Check it out:

The average amount families spent for the 2012-2013 academic year, including loans and all other sources, was $21,178, the study says. That’s about the same as a year ago, but down from a peak of $24,097 the previous year. College sure hasn’t gotten cheaper; families are getting smarter.

“That decline does not reflect lower college costs; students saved by choosing less-expensive schools, living at home or hustling more for scholarship and grant money,” Reuters says.

Scholarships and grants now cover 30 percent of costs, compared with 25 percent four years ago, Sallie Mae says. Parents’ income and savings now account for 27 percent, down from a 2010 peak of 37 percent — or about a $3,000 difference for a school year.

Even wealthier families are scaling back college expenses. Families with an annual income of $100,000 or more spent an average of $23,913 in the most recent academic year, only 7 percent more than the average middle-income family.

The study says slightly fewer families are borrowing money to cover college costs — 32 percent — but those who do are borrowing more. The average amount borrowed through federal student loan programs was up from $5,327 in 2009 to $8,815 this year.

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  • Sarah

    The US military is NOT cheap or free. Taxpayers pay for it one way or another. Let’s not forget they’ve raised the bar on qualifications for the military and they’re decreasing the size of the Army. This also means that when soldiers retire they’ll be hard pressed to find work since many jobs won’t translate to civilian careers. If you make 50K on a base busing soldiers around you’ll be lucky to make 1/3 of that in civilian jobs. They’ve cut benefits for young recruits meaning you’ll have to enlist for 30 years instead of the usual 20 to get comparable retirement benefits. I stopped my enlistment due to the horrific scandals against women, discrimination, and having the recruiters jerk me around on information. I talked to four people and they lied, changed their story, and wouldn’t let me talk to an enlisted woman at all. I scored an 80 on a practice test and they hounded me, but in the end I knew it wasn’t worth risking my life on US soil. I shudder to think of all that goes on that women (or men) won’t report out of fear of retaliation. I’ve heard from former and current soldiers that the military is a nightmare to deal with, and in the end I’d be better off getting knocked up by a rich jerk, forcing him to marry me, or living off of welfare. (Yes, that’s sarcasm folks so don’t get upset about the welfare or pregnant comment please.)

    I’ll wager that more people will not got to college at all as the debt nor the ROI is worth it. If companies want to farm out the work overseas and not pay Americans a living wage/salary you can see the numbers on welfare rising. There aren’t any vocational schools where I currently live and the ones they want to build won’t offer skills that would get their graduates a living wage. CNC Machinists with experience make a whole $11/hr in Texas. It’s just pathetic. Sure, learn to code but even if you could make 90K keep in mind your job could still be shipped overseas and you’ll be lucky to make 1/4 of that here in the US. I know a graduate who writes code for a company with “christian values” at a whopping $10/hr. He gets no retirement 401K, no vacation, and no sick days. The US has more in common with third world countries than any first world country anymore. I say watch out for yourself, don’t waste your time helping those companies anymore. What is it that old people love to say? Oh yes, “You get what you pay for.” Funny they don’t take their own advice.

  • Sarah

    Have you not been reading about the scandals involving the military schools? An Atheist was forced out of West Point, students were blackmailed into ratting on their Air Force Academy coeds, the nuclear program found rampant cheating, rape is common, and fraud in the military is high. There’s no way I’d enlist now. You can even look up pay and rank to see what you would get, or talk to a recruiter about what rank you could enlist as. It’s not worth it to me.