Sallie Mae and Ipsos Public Affairs, a research company, shared some good news for college students and their families. In the latest research results, gleaned from a representative sample of 1,600 undergraduates and their families, the total amount paid for a year in college has decreased. With tuition costs increasing every year faster than the official rate of inflation, this is good news. Despite cost increases, more students are taking advantage of grants and scholarships to help pay for higher education.
From the 2009-2010 to the 2010-2011 academic year, families who received grants and scholarships increased from 55 percent to 67 percent. Overall, the cost decrease can be attributed to students and families choosing lower-cost schools to save money amid the recession, living at home rather than on campus, and reducing the academic schedule to part time.
The study also showed that families are looking more at the practical reasons for attending college rather than idealistic reasons. A larger percentage of students and families believe that earning a bachelor’s degree and receiving a college education is necessary for their intended occupation and for increasing income potential throughout their lives.
Digging deeper into the data, it’s interesting that most of the positive changes from one year to the next occurred for middle-income and higher-income earners. While the cost of college for families earning over $35,000 decreased, and this decrease was even more substantial for families with household incomes over $100,000, low-income earners saw the overall price paid for a year at school increase.
On the other hand, a glance at a chart shows that academic year 2009-2010 may have been the surprise rather than the most recent year. The cost of college was higher in that previous year than would be expected following the trend through from 2007-2008 to 2010-2011.
While access to grants and scholarships increased for families above the $35,000 annual income mark, these opportunities for low-income families stayed flat in terms of funding source. Low-income families have also increased as a percentage of the overall population of college students, and that is reflected in the most recent sample.
Here are some additional data points I found interesting from the study.
- Overall, more college-bound families are using the FAFSA to qualify for federal student aid, up to 80 percent in 2011 from 72 percent in 2010.
- Cost is still a significant factor when students and their families choose a college, with 64 percent of families eliminating colleges by the time in the application and acceptance process that the financial aid details are revealed. Fewer families eliminated a college based on cost earlier in the process, before researching schools, which seems to mean more families held out hope that financial aid would be bountiful.
- More than any time in the last four years of the study, students are willing to stretch financially for a good education (60 percent). Only 51 percent of parents were willing to stretch, though, own significantly from 64 percent.
- Ninety percent of students see college as an investment in their future, the highest percentage in the last four years.
- Down one point from last year, thirty percent of students want the experience of a college of education regardless of the potential of future earnings. Parents’ attitudes about the experience dropped nine points to twenty-four percent.
Whether a college degree is worthwhile will always be a hotly contested issue, particularly for career paths where the differential in income between high school graduates and college graduates is not stark. When families suffer economic hardships, or even when the general economic milieu is tending towards financial concern or volatility, family finances come into focus. Financial return on investment, at least for middle-income and high-income families, becomes a priority. While a college education is not the best idea for every high school graduate, I still would not discourage a student from enrolling in college and giving higher education a concerted effort.