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Richer families tap aid, choose cheaper schools to pay less for college

Families straining to pay for college are making savvier moves as costs rise.

More middle- and high-income students are choosing cheaper schools, living at home and getting grants and scholarships to pay for college, according to the Sallie Mae-Ipsos study,"How America Pays for College," that was released Tuesday.

Last year's study found families grappling with the recession by reaching deeper into savings to pay a record-high slice of the growing cost of college. This time, the average family surveyed paid a little less for the 2010-11 school year than the year before, because of different choices and more grants.

"While families were able to stretch in the shortest of terms, that can only go so far," said Clifford Young, pollster forIpsos. "There's some downsizing going on."

But they still send their children to college. Nine out of 10 students strongly agreed that it's "an investment in the future." Meanwhile, parents' anxieties about the economy dropped a bit after peaking last year. Rising tuition remains their No. 1 concern.

Families reported paying an average of $21,889 on college-related expenses -- including tuition, textbooks and rent -- this year. That's less than last year but more than in 2009 and 2008.

The price tag for wealthier students dropped. Families making $100,000 or more paid 18 percent less than last year, while middle-income families paid about 6 percent less. But families making less than $35,000 paid 14 percent more to meet this year's college costs -- $17,404 last year versus $19,888 this year. College now eats up more than half of such a family's household income.

Nearly all the 1,600 students and parents surveyed in the study reported making new or different moves to save money, such as going to school part time, picking a lower-priced college or living at home.

Tyler Zabel, 18, had been considering film schools in Florida and Chicago with tuition ranging from $25,000 to $42,000 a year. But he settled on Minneapolis Community and Technical College in part because the price tag is closer to $7,000 a year.

"It was the most logical route," Zabel said.

The survey, focused on students ages 18 to 24, indicates that most students and parents agree. This year's results showed a jump in the "practical value of a college education to families." More students and parents strongly agreed that college is "an investment in the future," and more cited "earn more money" as a reason to attend.

But after record highs last year, fewer parents were willing to stretch themselves financially for their students to attend.

The percentage that "strongly agreed" that they would "rather borrow than not go" dropped from 59 percent last year to 51 percent this year. Students' willingness to borrow, at 61 percent, was unchanged from last year.

About a third of poor students attend public two-year colleges, a greater share than other income levels.

But suddenly, a bigger chunk of high-income families are attending these low-cost institutions -- 22 percent in 2010-11 compared with 12 percent in 2009-10.

"This might help explain how middle- and higher-income families were able to reduce their contributions from income and savings," the study said, "and decrease the overall amount they paid for college."

More of those students also got grants. For the first time in the study's history, more families said that they filed the Free Application for Federal Student Aid -- 80 percent, compared with 72 percent who said so last year. Most of that increase came from the middle- and high-income categories.