NEWS

Study: Parents more willing to help pay for college

David Jesse
Detroit Free Press

College costs may be climbing, but an improving economy means more parents are willing to dip into their bank accounts to pay for their children’s college education, a new survey found.

The same survey — How America Pays for College 2015, published by SallieMae and Ipsos — found that, for the first time since 2010, parent income and savings are the No. 1 source of funding for paying for colleges. That took over the top spot from scholarships and grants.

“Parents are much less worried about financial and economic factors this year,” said Richard Castellano, the vice president of corporate communications at Sallie Mae, in a phone interview with the Free Press. “There also was reduction in the number of parents who believe their child won’t be able to get a job following graduation. They are much more comfortable that they can invest in their student’s education.”

Rick English, 54, of Northville, agrees with the survey findings. He’s in the midst of helping to pay for his third child to go to the University of Michigan.

“We’ve given each one of them the same amount of money, but I’m not as worried about it this time,” said English, a CPA for a large company. “When my first daughter went to school about eight years ago, I was worried about whether I’d have a job, or how much our house would lose value. I wondered if I’d have to dip into those accounts to live, but we managed to weather the storm and are in a much better spot now.”

Here’s some findings of the study, which is being released on Monday:

■The average amount being spent from a family’s income and savings was $10,365 per year. That’s up 17% from 2014.

■The total amount being spent on college was $24,164 annually. That’s up 16% from 2014.

■88% of families are willing to stretch financially to afford college.

■32% of the cost of going to college is being covered by family and relative savings. Scholarships and grants is the next chunk, at 30%.

■Only 13% of parents are extremely worried that their student won’t find a job after graduation, down from 27% last year.

■19% of parents are extremely worried student loan rates will increase. That’s down from 27% last year.

The decline in economic fear among parents also showed up in other areas.

“Specifically, fewer families chose a school close to home to reduce transportation costs, and fewer students were living at home while going to college,” the study authors wrote. “Separately, compared with the prior five years, fewer families reported eliminating colleges from their potential selection set due to cost.”

For the complete report, visit SallieMae.com/plan-for-college/how-america-pays-for-college/

Contact David Jesse: 313-222-8851 or djesse@freepress.com. Follow him on Twitter: @reporterdavidj