By CityTownInfo.com Staff
August 25, 2009
A new study has found that in the 2008-9 school year, 58 percent of families did not borrow money for college.
The study [originally located at http://www.salliemae.com/NR/rdonlyres/52D9FB57-D14A-46EA-A6D9-AECB284D13FD/11379/SLMGallupHowAmericaPaysReport082009FINAL2.pdf], called "How America Pays for College," was conducted by the Gallup organization for Sallie Mae, which is the largest provider of student loans in the nation. It surveyed 800 students and 804 parents throughout the country and found that students who did not borrow for college paid for their tuitions with their parents' savings and income, as well as grants or scholarships.
The study found that on average, grants and scholarships covered 25 percent of a student's costs, while parents' income and savings covered 36 percent. The New York Times points out that last year, grants and scholarships covered 15 percent, suggesting that more people are relying on such financial aid during the economic downturn.
Yet there are also signs that students are more likely to put off college to avoid debt: Fewer students indicated that they would rather borrow than not attend college.
The survey is the latest one portraying student debt as not quite the dire, widespread problem that it is portrayed to be. Recently, another study conducted by the College Board indicated that as many as one-third of 2007-8 bachelor degree recipients graduated with no debt.
"People think students are drowning in debt," noted Sandy Baum, an author of the College Board study, who was quoted in The New York Times, "and there is a small proportion of students that borrow an exorbitant amount, but most students graduate with a manageable debt load."
The Sallie Mae study found that most parents were confident about their ability to pay for college, although many noted concerns about lost savings and investments and lost income due to unemployment.
Not surprisingly, the study found that the cost of higher education is rising significantly: The total average cost of attendance was $15,931, a 9 percent increase over last year. Two-year community colleges cost an average of $5,608, four-year state institutions cost an average of $14,122, while private four-year colleges averaged $32,454--a whopping 17 percent increase since 2007-8.
Other findings indicated differences in borrowing based on demographics: Hispanics reported borrowing to pay for 32 percent of college costs and African Americans borrowed for 34 percent, compared to Caucasians who borrowed to pay for 22 percent.