The private student lender Sallie Mae has released its annual look at “How America Pays for College,” which continues to show how the Great Recession shook up college funding. The share of college costs that parents are shouldering has shrunk in recent years. In 2009-10, parental income and savings covered an average of 37 percent of college costs. This past school year, that fell to 27 percent. The dollar amount parents paid from savings and income fell 35 percent, to $5,727.
At the same time, the share of a family’s college costs covered by grants and scholarships rose to 30 percent from 23 percent. Grants and scholarships, though, were divvied up in different ways. This year, 63 percent of families earning less than $35,000 a year received an average of $6,170 in grants. Just 19 percent of high-income families (earning $100,000 or more) received grants averaging $5,757. Federal Pell Grants, which max out a $5,550, specifically target needy students.
Scholarships went the other way, getting more generous for wealthier families. Thirty-five percent of low-income families got an average of $7,237 in scholarships, while 36 percent of wealthy families got an average of $10,213 in scholarships. The gap reflects the priorities of the colleges: 69 percent of the scholarships for wealthy students come from the schools themselves rather than nonprofit or public sources. This confirms the results of a recent study by the New America Foundation that found that schools are increasingly using aid to lure wealthy students rather than targeting those most in need. So as stagnant incomes continue to stress less affluent families, wealthy parents are getting a helping hand.