Ways to Ease the Burden of College Expenses

(TNS)—College is a large financial undertaking, but with the economy on the rebound more families are willing to shoulder the cost.

That’s the finding of the latest annual survey, “How America Pays for College,” by student loan provider Sallie Mae. According to the study, families of undergraduate students says their total cost of college—using savings, grants, loans and other resources—increased an average of 16 percent for the 2014-15 academic year. (Sallie Mae in April surveyed 800 parents of undergraduates, along with 800 undergraduate students.)

That contrasts with previous years, when spending remained essentially flat even though college costs were rising annually.

High-income families (those earning $100,000 annually or more) were the biggest spenders. But overall, parents shelled out an average of $7,683 from income and savings, up from $6,292 a year ago.

“How much more money parents were putting into paying for college was probably the most interesting increase that we saw,” says Marie O’Malley, senior director of consumer research at Sallie Mae.

The reason may have to do with growing confidence in the economy. Parents reported feeling less worried than in previous years about their income declining or the value of their home dropping. They were also more optimistic about their child finding a job after graduation.

That says, with college costs continuing to rise, the survey did reveal ways both parents and students are trying to save, which may be worth considering if you’re trying to trim college costs.

Comparison-shop. When deciding which college to attend, families consider cost throughout the application process and often eliminate schools because of price.

According to the study, 39 percent of families decided against a college because of the price tag, even before researching a school. Sixty-two percent eliminated a school because of costs after applying.

It’s often a good idea to wait to cut a school until after you receive a financial aid package. That’s because a university’s published cost tends to be more than the net price — what families actually pay.

During the 2014-15 school year, for example, the published cost for tuition, fees, and room and board for in-state undergraduate students at four-year public universities averaged $18,940, according to the College Board, a nonprofit organization with more than 6,000 higher education institutions as members. The average net price: $12,830.

Be resourceful. On average, parents cover the largest portion of college expenses — nearly a third of the bill—but students are mindful of costs.

In fact, 74 percent of students eliminated a school during the college search because of cost, compared with just half of parents.

“Students are worried about debt and don’t want to burden their parents with a big sticker price if they don’t have to,” O’Malley says.

But beyond taking out student loans, there are other ways to make college more affordable. The vast majority of students work during the school year. In other cases, families may target universities that are close to home (reducing travel expenses) or maximize tax deductions and credits for higher education, among other things.

Plan ahead. By far, though, the best way to avoid having to borrow heavily to pay for college is to plan ahead.

According to Sallie Mae’s study, families who planned and saved for college paid 21 percent more in total college costs than families that didn’t do so. But the average borrowing of students in families with a plan was 40 percent less.

“People who plan spend a little more, but that’s by choice,” O’Malley says. “They’ve thought about the total cost of school, and by the time their kid goes to college, they have more options. And the student ends up borrowing less.”

Carolyn Bigda writes Getting Started for the Chicago Tribune.