This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

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."

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,814.94 -2.96 -0.02%
S&P 500 2,067.03 -2.38 -0.12%
NASDAQ 4,758.2520 +3.36 0.07%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs