Magazine article The Hispanic Outlook in Higher Education

Hispanic Families Using More outside Sources to Pay for College

Magazine article The Hispanic Outlook in Higher Education

Hispanic Families Using More outside Sources to Pay for College

Article excerpt

Hispanic Families Using More Outside Sources to Pay for College

Like all American families, Hispanic families are using more outside sources to pay for college than in previous Mlyears. Overall in 2012-2013, the amount of income and savings contributed by American parents and students made up less than 38 percent of the average family spending on college which is down from 46 percent in 2009-2010. For Hispanics, parents' and students' income and savings paid for 33 percent of college costs last year as compared with 49 percent in 2009-2010. These findings are part of the most current report from Sallie Mae on How America Pays for College which provides information about the resources American families invest in an undergraduate college education and tracks families' attitudes toward attending and paying for college.

Since 2008 Sallie Mae has been issuing similar reports which are based on interviews with 800 hundred undergraduates and 802 parents with a focus on undergraduate students ages 18 to 24. The report includes samples of Hispanic and African-American families to help ascertain whether race and ethnicity influence how families pay for college.

Spending on College Levels Out

The report found that spending on college has leveled out for all families, with the average spent on college in the 20122013 academic year of $21,178, the same as 2011-12. This suggests a decline in average college spending since 2010, when families paid a peak of $24,097.

Despite this flattening there have been shifts in spending within income groups. Middle-income families spent an average of $22,197, 10 percent more than in 2012. In contrast, highand low-income families decreased their spending. Highincome families spent far less over the past four years, dropping sharply in 2011 and then steadily since then. As a result, the gap in spending between high-income and middle-income families, which was 28 percent in 2010, has narrowed dramatically, with high-income families spending $23,913 in 2013, only 7 percent more than the typical middle-income family.

Spending by low-income families also decreased. The average amount low-income families spent on college in 2013 was $18,034, a decline of 9 percent since 2011.

How America Pays for College acknowledges that families have become more cost conscious in choosing and paying for college. Research shows that Hispanic families are more likely to choose less expensive schools as a cost savings measure. Hispanics students also are more likely than whites to consider living at home or attend a community college and are more likely to attend part-time than other racial/ethnic groups.

Parents' Contribution Wanes

The recession and the slow economic recovery have placed significant stress on parents' ability to pay for college with their incomes and savings. Parents' average out-of-pocket spending has decreased by 35 percent since 2010, from $8,752 to $5,727. The reduction in parents' contribution has occurred at a greater rate than the overall decline in the total spending of college. As a result, over the last three years, parents' income and savings have paid for a smaller share of total college costs: 27 percent this year, compared to 37 percent at its peak in 2010. This decline is a direct result of a drop in parents' incomes.

While parents are paying less from their income and savings, rebanee on 529 college savings plans is rising. …

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