Study: Parents are funding less of their kids' college tuition

(CBS News) LOS ANGELES -- Nobody but bankers was happy when interest rates on college loans doubled to 6.8 percent this month. But Wednesday, the Senate may vote on a plan to roll them back. College costs have been soaring, and a study out Tuesday shows that parents are not picking much of the tab as they used to. In 2010, they funded 36 percent; now it's more like 27 percent.

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Jessica Phan will be a freshman at the University of California, Irvine. Her grades and need got her a state grant that will cover more than 90 percent of the $15,000 tuition.

Jessica Phan will be attending the University of California, Irvine. She acknowledge that cost was a factor in terms of searching for colleges.

/ CBS News

Asked how much of a factor was cost in searching for colleges, Phan replied: "It was the biggest factor, actually. I was actually going to apply to a bunch of private schools, but I didn't apply to any because my mom could not afford them anymore."

The survey released Tuesday showed 67 percent of students eliminated schools during their college search because of cost -- up from 58 percent in 2008. Parents used to pay the biggest share of their children's tuition bill. Now grants and scholarships cover 30 percent of college costs, while parents fund 27 percent. Loans cover 18 percent.

It's not that parents are suddenly cheap -- it's that college tuition has outpaced inflation by 27 percent in the past five years. Tuition and room and board at a private four-year college averages just under $40,000.

"Each year it goes higher and higher," said Phan, "and it's hard because I know my family income isn't increasing at the same rate that college tuition is increasing. I was very careful to make sure that I didn't ask my parents for too much."

Phan plans to live with an aunt close to campus, saving $10,000 in room and board.

"If I didn't have the scholarships or grants," she said, "I would definitely be struggling with debt until I was 40. It's just too much."

While her first year is all but paid for, she has to keep her grades so she can keep her grant.

Source: http://feeds.cbsnews.com/~r/CBSNewsNational/~3/HsQD91pRi7E/

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