Parents today are contributing far less to their children’s postsecondary degrees than they did in the past, according to a new report by student loan provider Sallie Mae.
The report, which was released Tuesday, found that on average parents contributed only $5,727 per child during the 2012-2013 academic year. Just three years earlier, in the 2009-2010 academic year, parents were contributing over $3,000 more annually – a decrease of 35 percent over that three-year period.
This is ultimately forcing students to take out more in student loans, which are at an all-time high.
More parents are realizing the importance of a college education, but they are struggling to pay the ever-rising costs. Sarah Ducich, a senior vice president for public policy at Sallie Mae, told The Wall Street Journal that “Parents are still willing to stretch themselves financially, but their incomes just haven’t kept up.”
Coupled with statistics showing increased awareness of cheaper universities and alternative living options, this shows a new level of cost-consciousness in higher education. More students are rejecting dormitories and living at home, including students coming from families making more than $100,000 annually.
Moreover, the report found that families are increasingly considering the cost of the school into the admissions process. In 2012, two in three families eliminated colleges from consideration based on their cost, compared to just 56 percent in 2009.
“I think we’ve entered into a different era with regard to how families approach paying for college,” Ducich said. “They are now approaching it with a cost consciousness they didn’t have prior to the recession. This is the new world of higher education.”
With youth unemployment still over 16 percent, this economy has been particularly hard on young people. It really makes President Obama’s claims that the economy is “back to where we were” when he took office seem surprisingly optimistic.
Young people must be asking – when will this president speak realistically about the adverse effects of his economic policy on young people?
