Cost rises to top of college selection criteria.
With Anna, 20, a junior at Luther College, the conversation started with size and quality and "what fits you," dad Boyd Murray said, before diving into cost. Now as Leah looks at schools, cost is where the conversation begins.
"The biggest deal all of sudden when I am looking at schools is the financial support the institution might be able to provide my children," Murray said. "The economy has affected our search criteria, no doubt."
In the past few years, in the heart of the recession, the Murrays slipped in contributing to college savings and their return on investments for college savings hit the skids. They, like many families with college-bound teens, are less prepared for the costs of college than they had been in the past.
Parents are struggling harder to pay for a college education, and colleges' reputations and atmosphere are becoming less influential while the availability of financial aid is becoming a larger factor in the decision of where to send children to school, according to a 2010 survey conducted by college admissions counseling service
ApplyWise.com and media company NextStepU.
The survey found:
* 34 percent of parents said their child is likely to take two years at a community college and then transfer to a four-year school, compared with 13 percent in 2008.
* 65 percent of parents will pay for their child's college education differently because of the economic events of the past two
years and 56 percent of families' financial situations are worse now than two years ago.
* 22 percent of parents haven't saved at all for their child's college education, and 21 percent have saved less than $5,000,
* Availability of financial aid increased in importance from 9 percent in a similar survey in 2008 to 18 percent in 2010, while a college's reputation declined in importance from 17 percent in 2010 to 11 percent in 2008;
Ellyn Foun has run into similar challenges when planning for college with her daughter, a high school junior. She had started saving for her children's college education when they were still young through a 529 Plan, which is an education savings plan that offers tax breaks and incentives. But, when the economy went sour, the savings took a hit.
"We found when the economy went bad we had to borrow from Peter to pay Paul. A lot of that money was lost when the economy went down," said Found, who has older children who already have been to college.
To compensate, Found stresses to her daughter the importance of getting good grades to open the door to scholarships, and her family catches a break because her children are spaced four grades apart so ideally there won't be more than one child in school at the same time, she said.
For Murray, he sees the college savings issue both from the perspective of a parent but also professionally as someone who works with clients on savings plans through his State Farm office.
"What I am running into now are families who started regular monthly contributions to education savings that have had to decrease monthly contribution or quit all together, and families who really want to get started haven't been able to do so because they haven't received raises," he said.
Mark Warner, director of student financial aid at University of Iowa, said he has seen an increase in the number of people filing forms known as FAFSAs, or Free Application for Federal Student Aid, to help defray college costs.
Warner said he hears from some people who have grown weary of saving under the presumption that financial aid is directed toward people who can show financial need, or in other words, he said, people who haven't saved.
However, that is not a sound strategy and despite the tough times, people should continue saving for college as best they can, Warner said.
"I don't think people are advantaged by not saving," Warner said.
BY B.A. MORELLI, IOWA CITY PRESS-CITIZEN
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|Publication:||Community College Week|
|Date:||Nov 29, 2010|
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