Study: Middle Class Parents Paying Least for College

As U.S. high school seniors pare down their college wish lists and parents sweat over the bills, a new study by student loan lender Sallie Mae illustrates the gulf between the sticker price of college and the actual cost.

While tuition for a four-year private college averages $48,000 a year, according to the College Board, the typical family pays just $26,458 for all types of higher education, according to "How America Pays for College," Sallie Mae's latest in a series of surveys on college financing.

For the 11th year, the methodology changed, so the 2018 data released on Wednesday is not exactly comparable to that of previous years. But the results line up with those of the most recent years, the study authors said, with parents reporting paying slightly more out of pocket than the year before.

Of the $26,458 total this year, parents are contributing 34 percent directly out of savings or income, and students putting in 13 percent. Scholarships account for 28 percent, with the rest covered by parent and student loans.

The middle class is faring better than both higher and lower income families in reducing out-of-pocket college spending. For families earning $35,000 to $100,000 per year, student and parent contributions add up to about $10,000, while scholarships cover 31 percent of the total.

In contrast, households making more than $100,000 are paying just over $13,000 and scholarships cover 23 percent.

Those making less than $35,000 pay the most, with parents and students contributing $14,500. Scholarships cover 27 percent of the cost.

Loans for all groups are roughly on par, with middle class parents borrowing slightly more than other income groups.

"This undermines a common complaint of middle income families that they are too wealthy to qualify for financial and too poor to afford college," said financial aid expert Mark Kantrowitz.

But the cost is challenging across the board. "The reality is that everybody struggles to pay for college. Low-income families pay a greater share of total income to send their children to a community college than middle-income families pay to send their children to a private nonprofit 4-year college," added Kantrowitz.

A net price calculator can help you assess the difference between the list price of a college and your individual cost based on your financial aid situation. Each institution should have one available on its website.

You can also find out more through the U.S. Department of Education website.