This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Richer Families Get More College Scholarships for Their Kids

NEW YORK ( TheStreet) -- Sallie Mae has rolled out its annual report on How Americans Pay For College, and it shows a surprising trend in how student financial aid is doled out: The wealthier the family, the more scholarship money the student gets from colleges and universities.

Looking at families who used scholarships to pay for college, the Sallie Mae study compared a family's annual income levels by how much average scholarship money they got this year. This is how it broke down:

More Than $100,000: $10,213
Between $35,000 and $100,000: $8,384
Less than $35,000: $7,237

Government grants were a different story, as that middle tier of families got the most money on average: $7,037, compared with $6,170 for families earning less than $35,000 and $5,757 for families that earn more than $100,000 annually.

Are the scholarship figures surprising? Yes. Fair? Not particularly, as the Sallie Mae data show that grants and scholarships are the most common way families pay for college.

The study breaks it down like this:

How the typical family pays for college
Grants and scholarships: 30%
Parent income and savings: 27%
Student borrowing: 18%
Student income and savings: 11%
Parent borrowing: 9%
Relatives and friends: 5%

The good news for all families is that, despite reports of soaring tuitions and fee hikes nationwide, the average annual amount spent on college has trended down over the past three years, according to Sallie Mae data -- from $24,097 in 2010 to $21,178 this year.

What's troubling is the eye-opening drop in financial contributions from parents to their children's higher education. According to Sallie Mae, parental contributions to college costs are down 35% since 2010, to $5,727 from $8,752 -- or, percentage-wise, down 37% to 27% of all college spending in the past three years.

The Great Recession, apparently, was a real game changer for parents. "Affordability" is the watchword for college-bound families.

"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," says Jack Remondi, president and chief executive of Sallie Mae. "The study found that the majority of families do not have a financial plan to pay for college. We recognize that having a plan, however, increases the likelihood of success. That is the ultimate goal, for students, families, schools and for us."

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.19 -1.04%
FB $118.08 0.55%
GOOG $695.81 0.50%
TSLA $234.18 0.80%
YHOO $35.97 -0.11%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs