Recently, Sallie Mae did a study to figure out how Americans were paying for college in the year 2013. Some of the information they found was pretty interesting. So, today we’re going to talk about the biggest highlights the study uncovered.
The study found that there were 6 main sources for college funding in the United States. Those sources include…
1. Grants & Scholarships – Grants and scholarships were the largest sources of payment for college tuition in the United States throughout the year 2013. 30% of the cost of college education in the United States was covered through grants and scholarships.
2. Parent Income & Savings – Next in line, the parents of students pick up a hefty tab with regards to college education. In the year 2013 parents paid for a total of 27% of college education related costs. Not to worry, the study also found that 85% of parents agreed that the cost of college was more of an investment that will further their children’s ability for success in the future. This is the highest percentage of parents who’ve shown unwavering support for college education ever.
3. Student Borrowing – In 2013, student loans covered about 18% of college related expenses.
4. Student Income & Savings – That’s right, tons of students paid for their own college expenses through personal income and savings. As a matter of fact, 11% of college related costs in 2013 were paid through student income and savings.
5. Parent Borrowing – The study found that 9% of college expenses were covered by loans parents took out in 2013.
6. Relatives and Friends – Finally contributions to college education made by relatives and friends paid for about 5% of the United States’ college expenses in the year 2013.
Attitudes Toward College Depend On the Major Chosen
One very important thing that this study found is that it’s incredibly important to choose the right major. While everyone seems to agree that college is important, attitudes toward college by graduates vary depending on their course of study. If you do the math, it’s pretty easy to see why. The study found that some of the degrees that are most expensive to get yield the lowest average salaries for graduates; while some of the lowest cost degrees yield some of the highest paying jobs. Here’s an example…
The average social science major will pay $28,776 throughout the course of their education. Once they graduate, they will be welcomed into the work force at an average salary of $36,988 per year. The only kicker here is that the average college graduate makes about $44,455/year as a starting salary with some making more. For instance, if you were to choose Business as your Major, chances are, you’d spend around $18,576 on your education and earn a starting salary of $53,900 per year. So, if you plan to take advantage of a college education, make sure to choose your major wisely.
Investing In the Future Or Social Experience?
My favorite part of the study was the section that went over who looked at college as an investment. The study found that regardless of how much more money they could make in the future, some students would attend and pay for college simply for the social experience that comes with it. Here’s what they found…
· Math, Science, Visual and Performing Arts Majors – Feel strongly that college education is an investment in the future; one that is more important than social experience. These students are most likely to agree that college is becoming more and more important with regard to ability to succeed and make decent earnings.
·Professionals Such As Engineers – The vast majority of profession related majors such as engineering are filled with students that believe that they cannot obtain their desired occupation without graduating college. Therefore, regardless of social or intellectual experience, these students would be compelled to go to college.
·Visual And Performing Arts Majors – May not believe that a college degree is required to obtain their desired occupation, however feel strongly about the social and intellectual experience involved in a further education. About 50% of these students would attend college even if a higher pay day wasn’t the light at the end of the tunnel.
Putting It All Together
This study, although focused on how Americans pay for college, went far beyond that. In the study, they went over not only how things were paid but who looked at the college investment in what ways. Without rewriting the entire study for you, I couldn’t give you all the juicy information they’ve uncovered. So, don’t hesitate, go on and take a look for yourself!
About the Author:
Today’s guest article comes from Josh Rodriguez. He is a finance professional currently writing at www.Settlements.org. Check them out if you are considering selling structured settlement payments or annuities.