Mom and dad are spending again.
For the first time since 2010, parents are the biggest contributors to college bills. At 32%, their giving just outpaces the 30% paid through scholarships and grants. That's according to a national survey on how Americans pay for college by Sallie Mae and Ipsos, an independent market research company based in France.
Marie O'Malley is the senior director of consumer research at Sallie Mae and an author of the study.
She says the improved economy has a lot to do with it. “In addition to having more money, [parents] may just be feeling less concerned about future access to money. They are feeling a little more confident that whatever they invest today, it's going to be okay.” On average, parents are paying $24,164 for college costs.
This number is up 16% from last year and includes things like transportation, books, room and board, and tuition. O'Malley speculated that this increase was closely tied to the fact that parents are growing more confident that their student will be able to find work upon graduation.
Yet while the study says that nine in ten parents expect their kids will attend college, many don't have a long-term plan for the expense. O’Malley explained that six in ten parents are not confident that they will be able to meet the continuing costs of college, and “only about two in five families have a plan to pay for college before the child enrolls.”
Meanwhile, students are hustling to cover costs while in school. 74 percent of students worked during the year to make ends meet. The majority were employed year-round and work an average of 22 hours per week.
"One of the important messages that I'd like to get out there," O'Malley said, "is that families who create a plan have more options available to them when the time comes."
- Josh Andrew, Michigan Radio Newsroom
