Wednesday, July 24, 2013

Few Plan for College Expenses

Only 43 percent of American families know how they will pay for college before their child enrolls in school, according to the latest Sallie Mae survey. The college cost "surprise" that greets many families as their child heads out the door is one factor behind the rise in student debt.

The typical family with an 18-to-24-year-old enrolled in an undergraduate program paid $21,178 for college in the 2012-13 school year. The funds came from a combination of parent income and savings ($5,727), loans ($5,760), grants and scholarships ($6,355), student income ($2,284), and gifts from relatives and friends ($1,053).

The out-of-pocket parental contribution to college costs has fallen 35 percent since 2009-10, according to the survey, probably because parents are steering their children toward less expensive schools. During the college admissions process, 67 percent of families eliminated schools from consideration because of their cost.

Source: Sallie Mae, How America Pays for College 2013

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