Study: Grants, scholarships top financial aid - KFVS12 News & Weather Cape Girardeau, Carbondale, Poplar Bluff

Study: Grants, scholarships top financial aid

WASHINGTON (AP/KFVS) - Parents are picking up less of their children's college costs while grants and scholarships now have the top role in paying the bills, according to a report released Tuesday by loan giant Sallie Mae.

Since the recession, more college-bound students have eliminated schools from their searches based on costs and have relied less on their parents once they get to campus, the report found. Worries such as tuition increases and job losses seem to have faded as the economy has improved, yet parents and students still make decisions on schools, majors and work schedules based on the price tag.

Over Southeast Missouri State University, students say scholarships and grants are vital in order to pay for college.

"I was very fortunate this semester that I was just told that I got an endowed scholarship which was awesome," Andrea Gills said. "Those scholarships aren't huge but everything adds up and everything helps."

College spending was about $21,000 during 2012, down from a peak of $24,000 in 2010, according to the Sallie Mae-Ipsos Public Affairs report.

Gills and other students say scholarships and grants help students academically as well. If they need to meet certain academic standards for the scholarship or grants, they are more likely to be motivated.

The annual survey of student financial aid found students earned about $6,300 in grants and scholarships to pay for college costs, taking the top spots from parents. Student loans were the third most common source to pick up the bill for courses, housing and books.

The average student borrowed $8,815 in federal loans.

The rate for those loans was the subject of debate in the Senate this week, as lawmakers consider a compromise that would offer some students lower rates for the next few years but would prescribe higher rates for future classes.

Last year, the average family turned to grants and scholarships to cover 30% of college costs. Parents' income and savings covered 27% of the bill and student borrowing covered 18%.

"Parents are willing to stretch themselves," Ducich said "It's not that they're willing to pay. It's that their income is not keeping up."

Parents' enthusiasm for college has not shriveled, though. The survey found 85% of parents saw college bills as an investment in their children's future.

"We're in a new normal where big ticket items like college, families will pay for them but won't stress about them too much," said Cliff Young, managing director at Ipsos.

One-fifth of parents added work hours to pay for college and half of students increased their work hours, too. The report found 57% of families said students were living at home or with relatives, up from 41% last year and 44% in 2011.

Among other strategies employed to deal with costs:

One-fifth of students from low-income families chose to transfer to less expensive schools.

About one-fifth of students also said they changed majors to fields that were expected to be more marketable upon graduation.

In all, 67% of students and their families eliminated colleges at some stage during the application process because of costs, up from 58% in 2008.

"It forced them to adopt new behaviors of savings and ways to find nickels and dimes," Young said.

The tuition sticker price at public 4-year colleges is up 27% beyond overall inflation over the last five years, according to the latest figures from a separate study from the College Board. This past year it rose nearly 5% to an average of $8,655 nationwide. Including room and board, the average sticker price at public colleges is now $17,860, and students pay on average $12,110. At private 4-year colleges, the average full tuition price is now just under $40,000, with the average student paying $23,840.

What does that mean for the average college student?

About two-thirds of the national college class of 2011 had loan debt at graduation, and their debt averaged $26,600, according to the most recent figures from the California-based Institute for College Access and Success. That was an increase of about 5% from the class before them.

The Ipsos telephone poll was conducted between April 10 and May 9 with 1802 parents of 18 to 24-year-old undergraduate students and 800 undergraduate students aged 18 to 24. The survey has a margin of error of plus or minus 2.5%age points.

Copyright 2013 KFVS. All rights reserved. Associated Press contributed to this article.

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