An annual study by Sallie Mae shows family spending on college tuition recently dropped to its lowest point since 2009, reports Beth Pinsker for the Christian Science Monitor.
To conduct the study, researchers from Sallie Mae study surveyed 800 parents of 18- to 24-year-old undergraduate students and 800 18- to 24-year-old undergraduate students between March 22 and April 24, 2017. Researchers asked about how the parents and students were paying for college. Researchers also consulted data from the National Center for Educational Statistics.
In general, parents are paying less for their child's college education today than they did in the past. Researchers found that parent income and savings generally covered 23% of tuition, down from 29% the previous year.
In a related trend, the study results also indicated students are borrowing more. In the 2016-17 school year, undergraduates paid for about 19% of the cost of college with loans, up from 13% in the previous academic year, Pinsker reports. Pinsker also points out that FAFSA completion rates rose in the 2016-17 academic year to 86%, which is 12 percentage points higher than it was in 2008.
Additionally, the study found that nearly 70% of prospective students eliminated some colleges from their options because of cost, writes Pinsker. Only 58% of students would have done that a decade ago, she adds.
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The biggest reason why parents are paying less may be price sensitivity, according to Mark Kantrowitz, publisher at Cappex.com. He is not alone in thinking this. Chief business officers at universities largely blame rising price sensitivity for the enrollment declines as well.
And the fact that such a large percentage of students decided not to attend colleges because of their costs also reflects a level of price sensitivity that can have negative enrollment implications, particularly for small and private colleges, according to recent analyses.
But colleges may be able to combat this problem by providing more transparent prices for tuition and fees, and by looking beyond traditional recruiting methods, according to financial aid researchers. Many students don't realize that the sticker price provided on college websites are rarely what they'll actually have to pay—just one of many common misunderstandings about college financing (Pinsker, Christian Science Monitor, 7/18).
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