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
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
Despite this flattening there have been shifts in spending within income groups. Middle-income families spent an average of
Spending by low-income families also decreased. The average amount low-income families spent on college in 2013 was
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
While parents are paying less from their income and savings, rebanee on 529 college savings plans is rising. In 2013, contributions from 529 college savings plans covered 7 percent of the total costs of college, up from 4 percent in 2012. Only 2 percent of Hispanics' education is paid for with a 529 savings plan as compared to 8 percent of whites.
In 2013,18 percent of the total cost of college was covered by student borrowing and 9 percent by parent borrowing, the same as last year. While parent borrowing has remained fairly consistent over the past five years, the share of college costs covered by student borrowing increased last year from prior years when pre-recession student borrowing contributed 14 percent of the total cost of college.
Slightly fewer students borrowed in 2013, but those who did took out larger loans than in previous years. Students borrowed more through federal loans specifically, on average
When looking at types of borrowing, it is significant to note that Hispanics take out private loans to pay for tuition at a rate that is twice as much as all other groups. Last year 8 percent of Hispanics borrowed private education loans as compared to the average of 4 percent for all groups. Researchers at the Project for Student Debt say Hispanics turn to private loans for a variety of reasons. In some cases, family immigration status can be an obstacle for Hispanics who do not want to give personal information required on government loan forms. In addition, many Hispanics attend two-year or for-profit schools that do not participate in federal or state loan programs.
Grants and Scholarships Increase
Grants and scholarships paid for 30 percent of college costs for the average family in 2013. The average amount of grants and scholarships across all families,
The post-recession reality appears to be that grants and scholarships have replaced parent income and savings as the major contributor to paying for college.
Parents' Worries Decline
While most families expressed concerns about paying for college, parents in low-income families tend to be the most worried about economic issues, especially about possible job loss and the availability of student aid. This year, however, lowincome parents were far less worried than other parents and less worried than previous years that schools would raise their tuition. Only 17 percent were extremely worried, compared to nearly one-third of middleand high-income parents.
Finally the report found that parents are still firm believers that college is a sound investment. In 2013, 85 percent of parents strongly agreed that college was an investment in their child's future, the highest in the six years since the study began. "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," said
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