Paying For College: Parents Contribute Less Money to Finance Child's Education Due to Weak Economy

In a weak economy, post-recession, parents are finding themselves unable to contribute to their child's college funds, according to multiple reports.

Students are looking for alternative ways to pay for college, including relying on student loans, grants and scholarships. More students are deciding to live at home and attend a local university.

A new survey released by Sallie Mae on Tuesday found parents are contributing less to college expenses than they were four years ago.

"In this post-recession environment, families overwhelmingly believe in the dream of college, yet they are more realistic when it comes to how they pay for it," Jack Remondi, Sallie Mae's chief executive, told the Los Angeles Times.

The Wall Street Journal broke down how much parents were able to financially contribute:

Parents shelled out an average of $5,727 from their income and savings for each child's college costs in the 2012-2013 academic year, down more than a third from $8,752 in 2009-2010, according to an annual report on college funding by student loan provider Sallie Mae to be released on Tuesday. The share of college costs paid by parents out of income and savings fell to 27% from 37% three years ago. The figures don't include borrowing by parents, which also declined slightly in the period.

"Parents are still willing to stretch themselves financially, but their incomes just haven't kept up," Sarah Ducich, senior vice president for public policy at Sallie Mae, told the Wall Street Journal.

According to the Wall Street Journal, 30 percent of college costs were covered by institutional grants, up seven percent from 2009-2010 rates.

Sallie Mae reports 57 percent of families said a student was living in their home, which is up 14 percent from 2010.

"I think we've entered into a different era with regard to how families approach paying for college," Ducich said. "They are now approaching it with a cost consciousness they didn't have prior to the recession. This is the new world of higher education."

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