College Costs Increase As Family Incomes And Savings Remain Flat
by: Ed Mayberry, December 6, 2013 4:12:00 am
The problem of rising tuition is compounded by family income remaining basically flat. That means it's more important than ever for parents to find ways to save, according to Linda Donovan with Morgan Stanley's Houston office.
"As we've seen, this economic downturn today — we're living it today — how much more important it is to have higher education so that you can have better chances of securing higher-paying careers, versus someone who doesn't go to college, despite debt that comes with it."
Donovan recommends starting early on savings.
"I would highly recommend sitting down with a financial professional to run projections for you and then create a plan. And there's also sources online that you can send these families to."
Sallie Mae's "How America Pays for College" study finds parental income and savings covering 27 percent of college costs, compared with 37 percent in 2010 — a new post-recession reality.
Graph from Sallie Mae's National Study of College Students and Parents, page 6