The ever-rising cost of college and financial burden of student loans are causing families to eliminate America's best and most expensive schools in the application process because of their price, The Fiscal Times reported.
According to a report released this week by the financial aid provider Sallie Mae, less parents of graduating high school seniors are able to pay for their child's tuition. More families are seeking grants and scholarships to cover the cost of school.
In addition, about 67 percent of families are eliminating colleges in the application process due to the cost being too high. That percentage was 56 in 2009. 40 percent even dismissed a school based on price before researching what that school had to offer.
Sallie Mae found that 18 percent of students are borrowing money with student loans to cover their tuition, room and board costs. That rate had been 14 percent before the recession hit the nation. The economic struggle has kept wages stagnant, while costs continue to rise, causing families to look for other ways of funding an education.
Grants and scholarships have also been on an incline in past years. Four years ago, grants and scholarships covered 25 percent of college costs, while the latest report stated that number had risen to 30 percent.
Another issue is how the student or the parent will get their money back. With various career fields struggling more than others in terms of unemployment, it is harder for families to pay back loans.
"Families are not only becoming more cost-conscious, but they're also more worried about their return on investment," said financial aid adviser Mark Kantrowitz. "In-state public schools are a much better deal for most families than private schools that charge $50,000 or $60,000 per year and aren't very generous with their financial aid."
Kantrowitz said his clients will chose the school with a better fit if the cost difference is around or under $1,000. If that difference is $5,000 or more, the usually tend to choose the lower costing school.
Paul Combe, president and chief executive officer of American Student Assistance, said being thorough in investigating a school's cost is the best way to choose a college.
"You don't want to eliminate schools based on bad information," Combe said. "The only way to really know whether you can afford a school is to work through the numbers. Consider what your debt payment will be after graduation."