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College Costs Higher Than Previous Years

October 05,2010 by: admin

Education remains an important aspect in the economy, but studies show that it also requires a lot of money to get through. Gallup Inc and Sallie Mae reported lately that families have paid more on college education in 2009 to 2010 than the previous years. How America Pays for College, the said report, was conducted by calling up undergraduates numbering to 801 with ages 18 – 24, and parents with 823 respondents from the month of March to May. 

Gallup conducted the survey by requesting dollar figures, without the financial aid, as well as the  individualized list of the specific expenses, such as grants and loans. 

Every year, parents and students have placed larger amounts for the itemized expenses than their budgeted total expenses. The combined expenses from all of the sources reported by the families for the two years, 2009 and 2010, averages to $24,097 representing an increase if 24% from 2008. 

To sufficiently cover all the costs, parents and students have utilized high amounts of scholarships and grants, parents’ income and savings, borrowings done by parents, students’ income and savings, borrowings by students and contributions provided by relatives and friends. Thirty seven percent of the costs were covered by the parents’ income and savings, 10% by their borrowings (parents), 23% from scholarships and grants, 14% from students’ borrowing, 9% by students’ income and savings, and 7% by contributions from relatives and friends. 

Gallup Senior Consultant and head researcher of the study Bill Diggins said that the perceptions of the American families determine their behavior. Averagely, the respondents reported student borrowing rose to 25%, starting from $2,721 and becoming $3,396, while borrowings made by parents rose to 27%, from $1775 up to $2,261. In general, the study concluded that a little over than fifty percent of family pay college costs without borrowing. 

The report targets only the traditional-age students and is concerned of the annual borrowing more than the debt that students have upon graduation. This is why there are lesser families who borrowed for the costs. 

Also included in the report are the differences in financing patterns provided by ethnicity and family income. For instance, a family earning an income of less than $35,000 has observed a constant attendance cost which may explain why students belonging to this kind of family are transferring to two-year college schools. Most Hispanic parents stated that they were so worried about issues in the economy, such as tuition fee hikes and unemployment, as compared to the white and black families. 

It was also seen that the college expenses are affecting the college choices of families. About 63% of respondents said that they have not considered college due to financial reasons. A large portion of the respondents also said that they eliminated colleges upon receiving financial aid and grants. 

The study has not also found a sign of more families completing the Free Application for Federal Student Aid. In the last years, 3 out of 4 families filled the FAFSA. From those who have not filled the application sheets, 37% stated that they don’t see themselves qualified, and 34% said that they have no need of it while 13% do not know of such form’s existence.

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