Fewer Families Pay for College Out of Pocket - The Arkansas Traveler: News

Fewer Families Pay for College Out of Pocket

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Posted: Wednesday, February 12, 2014 8:00 am | Updated: 11:07 am, Wed Feb 12, 2014.

As fewer Americans identify themselves as middle class, fewer families are paying for college tuition out of pocket, according to research.

The Pew Research Center recently conducted two studies on how the typical American family pays for college and how Americans identify themselves in social classes.

Results displayed that more Americans identify themselves as lower-middle class citizens than ever before. At the same time, more American families are paying for college with resources other than income.

In his State of the Union Address last month, President Obama addressed solving the issue of financial stress that comes with paying for higher education through organizing a College Opportunity Summit in Washington, D.C. More than 150 universities, businesses and nonprofits have made concrete commitments to reduce inequality in access to higher education and to help every child go to college and succeed when they get to campus, the president said in the address.

In the 2012-2013 school year, families relied on 38 percent of their own money to pay for college, on average. This is down from 46 percent in the 2008-2009 school year, according to one of the studies. The other 62 percent of college costs was divided between student and parent borrowing, student income and savings, money from relatives and friends and grants and scholarships.

In the same school year, students relied on loans to pay for 18 percent of their education, which was up from 14 percent in the 2008-2009 school year. Additionally, students relied on scholarships or grants to pay for 30 percent of their education, which was up from 25 percent in 2008-2009.

Lauren Doran, a freshman from Missouri, relied on one loan this year to help fund her education.

“Loans were a last resort,” Doran said. “The one loan was more of a cushion. My parents knew they could pay a certain amount, so the loan helped what what they couldn’t pay.”

Though Doran relies on her parents to pay for the majority of her college, the UofA wouldn’t be an option without the additional financial aid she received from the university.

“Out-of-state schools before scholarships was not an option,” Doran said. “If I had to pay the out-of-state tuition, I would not have been able to come here, but I got the 90 percent waiver of out-of-state tuition.”

For Todd Fernandez, a freshman from Oklahoma, the combination of student loans and access to financial aid from the university were major factors when deciding to attend the UofA.

“The money was a huge big factor,” Fernandez said. “I wanted to make sure where I went to school was a place my parents could afford. I knew they would support me in wherever I decided to go, but at the same time, I didn’t want to have to put a lot of stress financially on them.”

Taking out student loans, which are paying for 30 percent of Fernandez’s tuition, was one way to lighten financial stress for his family.

“It would be a lot more stressful if we didn’t take loans out,” Fernandez said. “My parents wouldn’t have any money in the bank if we paid the full amount for school. Plus it’s easier for them to get money over time, so the loans help give them more time to pay for tuition.”

Although college is expensive and there’s a lot of stress from finances, college is worth it in the end, Fernandez said.

“I just think education is important, not only because it can give you a career, but also because certain elements of college shape you as a person, and you can’t get those experiences anywhere else,” Fernandez said. “I think experience is something you can’t put a price on, and the relationships you build, you can’t put a price on those either.”

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