Early Planning / Funding


Each section provides insightful information to help with your college planning. This section covers questions parents commonly ask about college finances at early stages and statistics on college funding.

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What is the status of funding for public college education?

84% of all college students attend public institutions.

  • Since 2008, when the recession hit, total public funding for higher education has declined by 14.6 percent.
  • From 2000 to 2010, funding per pupil at state universities fell by 21 percent – from $8,257 to $6,532 in inflation adjusted dollars.
  • If you’re a state legislator, you look at all your state’s programs and you say, “Well, we can’t make prisoners pay, but we can make college students pay,” said Ronald Ehrenberg, the director of the Cornell Higher Education Research Institute and a trustee of the State University of New York System.



What is the trend in tuition increases?

From 1985 to 2011, college tuition and fees increased by 559%. During the same time period the cost of all consumer goods increased by just over 200%.

How are families coping with increased college costs?

A recent study by the research group Ipsos and the student loan giant, Sallie Mae, shows that approximately 70 percent of families are eliminating college choices based on cost. More students are also now choosing to enroll in community colleges, which is often the most affordable option.

  • Half of families can’t afford college

When asked to self-report, fewer than half of parents (47 percent) feel they can afford to send their kids to school, but a full 78 percent are willing to make at least one major sacrifice in order to do so. For many, this means shortchanging their retirements.

Is demand for college enrollment increasing despite the costs?

Bankrate commissioned GfK Roper to conduct a random survey of parents’ college funding plans as part of our yearlong Financial Literacy series. Parents with children younger than 18 were polled. The first question reveals a full 86 percent of parents expect their children to go to college, which shows a continuation of the upward trend of enrollment. Two-thirds of all high school graduates currently enroll in college, up from one-half a generation ago in 1975.

During a 10-year span ending in 2009, undergraduate enrollment has jumped 38 percent, with some of the highest growth occurring in Arizona (149 percent), Georgia (77 percent), West Virginia (56 percent), and Florida (54 percent).

What are some of the sacrifices and priorities of parents?

Sacrifices Parents Make for Children’s College:

  • 59% – Make deep cuts to discretionary spending (dining out, clothing purchases and trips)
  • 43% – Take a personal loan
  • 41% – Postpone Retirement
  • 39% – Take a second job
  • 24% – Take out a second mortgage or home equity loan

Parents Financial Priorities ranked higher than Children’s College:

  • 76% – Having any higher financial priority
  • 46% – Paying down debt
  • 42% – Caring for an elderly parent
  • 37% – Retirement Savings
  • 36% – Maintaining present lifestyle
How many families are coping by burdening their children with debt?

Borrowing to Pay for College

  • 20 million Americans attend college every year
  • 12 million or 60% borrow to pay for costs
  • 37 million Americans (more than 1 in 10) have student loans
  • Total student loan debt is over 1 trillion dollars ($1,000,000,000,000.00)
  • 41% of student loan borrowers are delinquent (more than 90 days past due)
  • Borrowers in their 30s have the highest delinquency rate
Are families are funding college effectively?

Family Savings for College

  • Over 67% of families save less than $3,000 per year for college (for all children)
  • Every dollar saved in advance significantly reduces the cost of college if paid by debt.
    • The cost to accumulate $10,000 over 10 years at 7% interest is $58/month ($6,960 total savings)
    • The cost to repay $10,000 over 10 years at 7% interest is $116/month ($13,920 total loan payments)
  • Families in previous generations cut expenses and took out loans to pay for college – this is no longer feasible and will be less and less feasible in the future
  • Only 48% of parents have saved any money for children’s college education (This is down from 56% in 1997)

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