Cost Becomes a More Important Factor in Students' College Decision

By Catherine Groux
Posted July 17, 2012 09:44 AM

More students are weighing the cost of college more heavily.
More students are weighing the cost of college more heavily.
While most students and their families agree that earning an associate's or bachelor's degree is an important investment, many individuals feel they simply cannot afford it as higher education becomes more expensive.

The Growing Cost of Higher Education

According to the College Board, the average sticker price for a public four-year school for in-state students has reached $8,244, while the cost of attending a public two-year school stands at $2,963. For individuals who enroll at private four-year colleges, the cost is typically $28,500 per year.

In general, this tends to be more than the average American family can afford. A 2011 survey by Fidelity Investments® indicates that the typical family can only pay for 16% of college costs, down from 24% in 2007.

Given this high cost of college, many individuals are weighing prospective schools' prices more heavily during the selection process. According to a new survey by Sallie Mae, about 69% of students and their families eliminated a college choice because of its cost, up from about 60% in 2009.

How Families Are Paying for College

In an effort to invest in their children's futures, parents covered an average of 37% of their children's higher education bills, the Sallie Mae report states. More than two-thirds of parents say they save up for college costs years before their kids enroll at a school, according to the Fidelity report. To do so, about 18% of parents said they encouraged an unemployed spouse to go back to work, while 17% said they were forced to take a second job.

Students, on the other hand, were typically responsible for paying 30% of their total higher education bill, often turning to savings and loans. Approximately 35% of students said they took out loans to pay for college, with 25% borrowing only federal loans and 9% using both federal and private loans. Only 1% of degree seekers said they borrowed only private loans.

Still, even with the many forms of financial aid available, the survey finds many students and their families are searching for small ways to save on the cost of college. For example, about 51% of families said their children lived at home to avoid the hefty price of room and board, while 55% said their children took on an extra roommate. Additionally, about 50% of parents and 66% of students said they limited their spending to save up for their associate's or bachelor's degree.

At the same time, many individuals are willing to attend a community college instead of a four-year school, often drastically cutting their tuition costs. The survey reports that 29% of students attended one of these colleges, compared to 23% two years ago.

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