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http://www.oregonlive.com/education/index.ssf/2010/08/american_families_report_deepe.html

Despite a sluggish and uncertain economy, American families are working more, cutting expenses and digging deeper into savings and debt to pay the climbing costs of college, according to a national survey released today.

Tom and Lenore Woods, who teach at the same Eugene middle school, will rely on their Oregon and Utah college savings plans to send their daughter, Alena Woods, 18, to Portland State University this year.

"That is going to pay for the first year or so," said Tom Woods, who says he's been cutting back on spending to invest more in the plans. But after that, he said, "we may have to look at loans."

Notwithstanding the costs, the Woods have no second thoughts about sending Alena to study at PSU. As with two-thirds of the families surveyed by Gallup for Sallie Mae Corp., a college lender, they agree that a college degree is more important now than ever.

The survey was a national sample of 1,624 students ages 18 to 24, and parents with children of that age group in two-year and four-year public and private colleges.

The survey showed 53 percent of students are in public universities, 23 percent in community colleges, and 19 percent in private colleges with the rest in private two-year colleges.

Families reported that they sacrificed more last year for college. Three in four families reported cutting spending, and half increased work hours or earnings to help pay for college. Forty-three percent of families reported their students lived at home while in college to save money.

"Families are digging deeper to invest in what they value," said Patricia Nash Christel, spokesperson for Sallie Mae. "At the same time, they are taking practical steps to reduce the costs."

Parents continue to provide the single biggest source of money for college, on average shelling out about one-fifth the total cost from savings and earnings. Fifteen percent of families last year drew on state 529 college savings plans that provide tax breaks, up from 11 percent the previous year.

Sam Shumaker, a construction worker from Gig Harbor, Wash., said he's relying on his college savings plan to help support two children at Portland State University.

He began investing 17 years ago for his son, Joel Shumaker, who registered at PSU last week to study environmental engineering.

The number of accounts in Oregon's college saving plan has climbed from 117,000 in 2008 to 126,500 this year, but contributions have declined during that period from $194 million a year to $85 million. The savings fund totals $1.1 billion.

Thomas Varga, 18, of Beaverton, also will get help from his parents' saving plan. But, as with most students, that is only one source.

Another stems from his high achievement at Southridge High School, which won him a $32,000, four-year presidential scholarship to the University of Oregon. In addition he works summers for a landscape firm and hopes to get a job as a residential assistant in a UO dormitory after next year to earn free room and board.

The Gallup survey showed that grants and scholarships accounted for about 23 percent of the money students raise for college.

While some students don't borrow, many students borrowed more than in the previous year, with 28 percent taking out federal loans averaging $5,807, and 13 percent taking private loans averaging $8,584.

James Johnson, 23, of Portland, said that he has no source of money other than a part-time janitor job to pay for his studies as a sophomore physics major at PSU. So he's relied on loans. He figures he'll be $32,000 in debt by the end of his sophomore year and worries about getting "tapped out" and unable to finance his graduate studies.

Brittany Duffy-Goche, 21, of North Portland, a junior at PSU, is working three jobs, including one with student government as a lobbyist, but she still must borrow. She expects to graduate $15,000 in debt. She said she worries about the economy and debt and students who are "getting priced out of an education."  

The Gallup survey shows families are more anxious about future costs than in previous years. A majority of parents said college is a worthy investment, but a higher number also worry that tuition will rise, scholarships and grants will shrink, the value of their investments and homes will decline and their children won't be able to find jobs.

Families reported they paid, on average, a total of $24,097, a 24 percent increase over the previous year.

Actual college cost increases, however, have not been nearly that sharp. The College Board, which sponsors the SAT, reports an average 6.5 percent increase in tuition and 5.4 percent increase in room and board for public colleges and universities nationwide last year and a 6.2 percent increase in tuition for private colleges.

The Board notes, however, that for 15 percent of full-time public college students, tuition climbed by 12 percent or more.

In Oregon, the total costs of college climbed last year between 3 percent and 7.5 percent in the state's seven public universities, and actually dropped 5.2 percent at Eastern Oregon University. Costs rose an average 5 percent in the state's nine largest private colleges.

The larger increases in the Gallup survey reflect the unreliability of self-reported costs, particularly for trends, said Melanie Corrigan, director of national initiatives for the American Council on Education, an organization of college presidents.

The survey is more valuable in showing how families are paying for college and where they are feeling pressure, she said.