Families borrowing less for college, report finds

Americans are borrowing less for college, and instead relying more on savings and income, a study from a student lender found.

In the 2013-14 school year, the typical family paid 22 percent of the total college cost through borrowing, according to Sallie Mae’s annual How America Pays for College study. That’s down from 27 percent in the previous two years.

Meanwhile, the share of college costs paid through savings and income rose. Student savings and income paid for 12 percent of costs on average, up from 11 percent in the previous year. Parent savings and income rose from 27 percent to 30 percent.

A large reason behind the shift was that parents making more than $100,000 significantly boosted their contributions to their children’s education. It’s been easier for them to do so, given a rising stock market and disparities in the economic recovery, said Sarah Ducich, co-author of the study.

“Their savings and income have rebounded a little faster than other people,” she said.

The typical low-income family, however, is also borrowing less. More of their college cost was paid for with income and savings as well, although the decline in borrowing largely came from the increased use of grants and scholarships.

On average, families earning less than $35,000 paid for 45 percent of the costs for college with grants and scholarships, compared to 37 percent a year earlier.

“The federal government has stepped up with more Pell Grants,” Ducich said. “And colleges and universities are targeting their aid to students at need and perhaps getting better at it.”

The average family spent $20,882 on college last school year, similar to the last three years, but off a peak of $24,097 in 2010.

To cope with those costs, students often choose a nearby college with in-state tuition and live at home or with relatives, the study found.

More in Herald Business Journal

Peoples, HomeStreet banks bump lowest salaries after tax cut

The banks with Snohomish County branches will raise minimum salaries for employees to $15 an hour.

Electroimpact cuts Mukilteo staff by 9 percent

“What we’re missing now is a monster anchor project,” the company’s VP said.

Exotic animals find compassionate care in Bothell (video)

At the Center for Bird and Exotic Animal Medicine, vets treat snakes, hedgehogs and even kangaroos.

How can you tell if you are getting good financial advice?

Assume that it’s still the same buyer-beware market that has always existed.

Amanda Strong (left) tries on an Angel of the Winds Arena hat as she and Courtney Brown hand out gift bags after the renaming ceremony Dec. 13 in Everett. The new name replaces the Xfinity name. (Andy Bronson / Her file)
Angel of the Winds to break ground on $60M casino expansion

“We think we’re on the cusp of becoming a major resort.”

In this Dec. 20, 2017, photo, a clerk reaches to a shelf to pick an item for a customer order at the Amazon Prime warehouse, in New York. (AP Photo/Mark Lennihan, File)
Amazon’s potential HQ2 sites leaves many cities disappointed

And yet, some municipal leaders are looking at the bright side of being rejected.

How do you retrieve an errant Boeing 737 from a muddy slope?

Turkish authorities used cranes to lift a plane that skidded off a runway.

Don’t take economic forecasts to the bank — or the casino

Air travel delays could spur a rebirth of passenger rail service.

Emirates orders 20 more Airbus A380 jumbos, saving program

The Dubai carrier also has options to buy 16 more. The program seems safe until 2029.

Most Read