Parents Cutting Back on College Spending, Says Sallie Mae

By DAVE CARPENTER

CHICAGO -- Families have implemented more cost-saving strategies to cut college spending in the past academic year, choosing less expensive schools and finding more economical ways for students to attend.

More students also are living at home in order to help afford college, according to new survey results.

The findings are from an annual study released Monday by Sallie Mae, the country's largest student lender.

They show that the average amount spent on college by families responding to the survey declined by 5% in the 2011-12 school year. More parents and students alike said they make their college decisions based on the cost they can afford to pay than in the previous four studies.

"This really reflects the economic conditions that we see today," said Sarah Ducich, senior vice president at Sallie Mae. "We are seeing families make adjustments, saving more money and being more cost-conscious."

The survey, conducted for Sallie Mae by the Ipsos polling firm, was based on telephone interviews in April and May with 1,601 college undergraduates and parents.

Parents spent an average $5,955 on college from their income and savings, results showed. That was down from $6,664 a year earlier and $8,752 the year before. They also borrowed slightly more -- $1,832 compared with $1,573 in the 2010-11 survey -- although that was still less than they did two years ago.

• <p> <strong>Location:</strong> Princeton, N.J.<br /> <br /> <strong>Undergraduate Enrollment:</strong> 5,220<br /> <br /> <strong>Total Annual Cost:</strong> $50,269<br /> <br /> <strong>Average Debt at Graduation:</strong> $5,225<br /> <br /> <strong>Students Who Borrow:</strong> 23%<br /> <br /> Princeton&rsquo;s no-loan financial aid policy, introduced a decade ago, means that less than one-fourth of students need to borrow, and the amount they do borrow is small. Princeton&rsquo;s average debt at graduation, at a little over $5,000, is the lowest among our top 200 private colleges.</p>
• <p> <b style="font-weight: bold; ">Location</b>: Berea, Ky.&nbsp;<br /> <br /> <b style="font-weight: bold; ">Undergraduate Enrollment</b>: 1,613&nbsp;<br /> <br /> <b style="font-weight: bold; ">Total Annual Cost</b>: $32,894&nbsp;<br /> <br /> <b style="font-weight: bold; ">Average Debt at Graduation</b>: $5,836&nbsp;<br /> <br /> <b style="font-weight: bold; ">Students Who Borrow</b>: 73%&nbsp;<br /> <br /> Plenty of colleges talk about keeping costs, and student debt, down, but Berea walks the walk: This Christian-focused institution covers the full $25,500 tuition for all students, out of a mix of grants and scholarships, leaving them to cover only $7,394 in remaining costs (including room and board). It&rsquo;s no surprise that average debt here is second-lowest on our list.</p>
• <p> <b style="font-weight: bold; ">Location</b>: Williamstown, Mass.&nbsp;<br /> <br /> <b style="font-weight: bold; ">Undergraduate Enrollment</b>: 2,029&nbsp;<br /> <br /> <b style="font-weight: bold; ">Total Annual Cost</b>: $55,360&nbsp;<br /> <br /> <b style="font-weight: bold; ">Average Debt at Graduation</b>: $8,369&nbsp;<br /> <br /> <b style="font-weight: bold; ">Students Who Borrow</b>: 43%&nbsp;<br /> <br /> With an average financial-aid package of about $40,000 a year, Williams brings the annual cost of its elite education to a relatively modest $15,360 for students who qualify. Williams admits students without considering their financial circumstances and meets the full demonstrated need of students who enroll.</p>
• <p> </p> <p> <b style="font-weight: bold; ">Location</b>: New Haven, Conn.&nbsp;<br /> <br /> <b style="font-weight: bold; ">Undergraduate Enrollment</b>: 5,294&nbsp;<br /> <br /> <b style="font-weight: bold; ">Total Annual Cost</b>: $53,700&nbsp;<br /> <br /> <b style="font-weight: bold; ">Average Debt at Graduation</b>: $9,254&nbsp;<br /> <br /> <b style="font-weight: bold; ">Students Who Borrow</b>: 28%&nbsp;<br /> <br /> An Ivy League school with a walloping endowment and a financial-aid budget of $117 million, Yale offers no-loan financial aid to more than half its students, including families earning well over $100,000. Result: Students who borrow carry away one-third less debt than the national average for borrowers at private schools.</p>
• <p> <b style="font-weight: bold; ">Location</b>: Claremont, Cal.&nbsp;<br /> <br /> <b style="font-weight: bold; ">Undergraduate Enrollment</b>: 956&nbsp;<br /> <br /> <b style="font-weight: bold; ">Total Annual Cost</b>: $55,700&nbsp;<br /> <br /> <b style="font-weight: bold; ">Average Debt at Graduation</b>: $9,435&nbsp;<br /> <br /> <b style="font-weight: bold; ">Students Who Borrow</b>: 36%&nbsp;<br /> <br /> This tiny, all-women&rsquo;s school awards generous need-based and merit-based grants as well as privately funded need-based loans, which do not accrue interest while the student is in school. (Students also have access to federally sponsored loans, such as Staffords.) Scripps is one of the three members of the Claremont Colleges (a consortium of five colleges and two graduate programs that share faculty and facilities) to make our top ten for low debt.</p>
• <p> <a href="http://www.kiplinger.com/slideshow/lowest-debt-private-colleges/1.html">Click here</a> to see the full list from Kiplinger</p> <p> <b>More from Kiplinger:</b></p> <p> <a href="http://portal.kiplinger.com/slideshow/best-values-private-universities-2012/1.html">10 Best Values in Private Universities</a></p> <p> <a href="http://portal.kiplinger.com/slideshow/best-values-liberal-arts-colleges-2012/1.html">10 Best Values in Liberal Arts Colleges</a></p> <p> <a href="http://portal.kiplinger.com/tools/privatecolleges/">See the Complete Private Colleges Rankings</a></p> <p> <br /> <strong>More from DailyFinance:</strong></p> <p> <a href="http://www.dailyfinance.com/2011/11/16/3-ways-to-get-a-free-college-education-with-no-strings/">3 Ways to Get a Free College Education (With No Strings)</a></p> <p> <a href="http://www.dailyfinance.com/2011/11/08/decades-later-student-loan-default-still-haunts-borrower/">Decades Later, Student Loan Default Still Haunts Borrower</a></p> <p> <a href="http://www.dailyfinance.com/2011/11/03/how-to-go-to-college-without-going-broke-and-yes-you-still-sho/">How to Go to College Without Going Broke (and Yes, You Still Should)</a></p>

Students took on more of the burden by digging deeper into their own funds. They spent an average $2,555 on college from their savings and income in the last academic year, up from $1,944 the previous year. But their spending wasn't enough to make up for cutbacks by their parents.

All told, parents funded 37% of college costs through spending or borrowing, down from 47% two years ago. Students accounted for 30%; grants and scholarships footed 29%; and relatives and friends paid for 4%, according to the survey.

Just over half of the students in the survey lived at home while they attended college this year, up almost 9% from a year ago. Most of that increase was accounted for by families with income of more than $100,000.

A shift toward two-year colleges also was evident for a second straight year, Salllie Mae said. Respondents included 29% who attended two-year public schools, up from 21% the previous year.

"American families are frustrated by the cost but they're being creative and employing different solutions to make sure their students can go to college," said Ipsos pollster and managing director Clifford Young.

The survey also found a decline in credit card use among college undergrads since the Credit Card Act took effect 2½ years ago. That legislation barred those under age 21 from having credit cards without a qualified co-signer or proof of sufficient income to repay the debt.

Although few used them to pay for college costs, 35% of students owned a credit card this academic year. That was down from 42% in 2010, the first year the survey asked about credit cards. The median outstanding balance was $196.