Chart: The Increasing Role of Parental Help
This chart comes to us as part of a series of data included in Sallie Mae‘s most recent “How America Pays for College” report. Of note this past year was the big increase in family assistance relative to other college funding sources. The average cost-to-student will run $24,164 in 2015, a substantial increase (about $3,300) from last year. To cover this increase, parental help has also ratcheted up, with an average of $10,365 coming from mom and dad to cover the bills (up about $1500 year over year).
In fact, parental resources have now become “… the number one source of funding, surpassing scholarships and grants for the first time since 2010.” According to Sallie Mae parental assets now account for 32% of total funding versus 30% from scholarships and grants. Also interesting to note, student efforts account for a full 27% of the total, split between income, savings, and borrowing.
In other words, with bills running almost $100,000 over a four-year period students and/or their families can expect to cover well over half of that total on average. Thing is, the “average” family I know doesn’t have that kind of money available. Thus I see over and over again students running off to college with everything they can muster financially thrown into the maw, only to return home a year or two later broke, confused, and frustrated at the experience. The nationwide data seems to support this trend.
Families must be vigilant as they plan their help to avoid this fate. For this reason I highly recommend exploring other options for boosting assets and decreasing costs. Also, it becomes extremely prudent to map out not only what students and parents have to offer, but to budget when the proceeds shall be applied to the college experience in order that the student can explore their options knowing the price point they must hit on a per-year basis.