Daily Management Review

Study Finds Parents Taking Increased Funding Responsibility for College Education in US


07/20/2015




Indicates Parents Less Concerned About Economic Factors Affecting Ability to Fund Education

Study Finds Parents Taking Increased Funding Responsibility for College Education in US
Parents take the biggest burden of funding children’s college educated in the United States. A recent survey shows that number of student who were funded by their parents’ pockets and savings to pay for the college education surpass the number of students who got scholarships and grants. This happened for the first time in the last 5 years.

This statistics was revealed in a study titled “How America Pays for College 2015,” by the Sallie Mae, the nation’s saving, planning, and paying for college company, and Ipsos, a global independent market research company.

The study found that the 32 percent of the students paid for their college education from the parent income and savings while 30 percent managed scholarships and grants.

The study concluded that for the parents, the college education is the number priority and the confidence of the parents in the returns from college education drives them to fend for the college education funding from their own pockets and put their money where their values lie.

The study was conducted after 1,600 telephone interviews that were conducted by Ipsos conducted in April 2015 in addition to the interviews of 800 parents of undergraduate students and 800 undergraduate students between the ages of 18 and 24.

The study also revealed that 16 percent students financed college education using student borrowing, 11 percent from student income and savings, 5 percent from parent borrowing and 5 percent from contributions from relatives and friends.

Some more interesting facts about family spending and college education for children were revealed in the study. The study found that for the first time in four years, families spent 16 percent more money on college in academic year 2014-15, the average cost for which was $24,164. The costs included tuition, room and board, living expenses and other direct and indirect costs.

Among the families spending more for children’s college education lesser number were concerned about their ability to pay due to economic factors in the future. Very few of the parents though worried considered elimination of colleges from consideration due to the costs involved and fewer still engaged in cost-saving measures in order to control college costs.

The study also dwelled into the qualitative aspect that encouraged families to spend more on college education. Michael Gross, vice president and head of the Higher Education practice at Ipsos Public Affairs claimed that families agreed to spend more was a matter of choice and not because of the rising costs of education. The families simple choose to pay more for college choosing it to be an important aspect for their children, the study noted.

This is also indicative of the betterment in the sense and feeling about economic turnaround in the US. According to the study, the families felt a greater degree freedom to concentrate on college funding for children as they were less concerned about future economic problems like job loss, declining home values and decreased value of savings.

The borrowing for college education pattern was also remarkably different. The study found out that 62 percent of families did not borrow any of the money they used to pay for college during academic year 2014-15. Students were the ones who primarily had the responsibility of borrowing the education loans from amongst those who borrowed money for college education.

An overwhelming number of college students, 74 percent, worked round the year to completely or partially fund their college education. The industry sectors where the students worked included food services and retail.

(Source: www.businesswire.com)






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