Students are relying more on grants and scholarships than Mom and Dad to pay for college, according to a study released today from Sallie Mae.
In its annual study of “How America Pays for College,” the giant lender said free money in for the form of grants and scholarships now pays 30 percent of the college tab. Four years ago, it was 25 percent. Sallie Mae said students now receive an average of $6,355 in grants and scholarships, compared with $4,859 in 2009.
In comparison, parents now kick in 27 percent of college costs or an average of $5,727. Parents’ generosity peaked in 2010 when they paid an average of $8,752 or 37 percent of the college tab.
Sarah Ducich, a senior vice president of public policy with Sallie Mae, said the growing reliance on grants and scholarships started a few years ago. The federal government increased funding to the Pell Grant program, while schools also started handing out more in such aid, Ducich said.
“That might be responding to the drop in parent income and savings,” she said. “Parents have been stretched.”
A positive sign: Families are more likely to consider the cost of a college before enrolling.
According to Sallie Mae, 67 percent of families said they crossed a college off their list based on cost, compared with 58 percent in 2008. And families are looking at ways to make college more affordable, such as having the student live at home or accelerating coursework, Sallie Mae said.
Maybe if families continue this comparison shopping of colleges, schools will respond by reducing tuition or increasing aid further. Students shouldn’t have to mortgage their twenties to attend a four-year college.