Sallie Mae study shows poor college financing

College students and their parents aren't very smart when it comes to saving and paying for their education, according to a study released this week by Sallie Mae.

The study found too few families are focused on total costs or have college savings plans like tax-advantage 529 plans. Meanwhile, too many students fail to complete forms for low-cost student loans, and are borrowing without thinking about whether their future income is enough to repay loans. Conducted by Gallup, the study was based on telephone interviews in May with 720 parents and 684 undergraduates enrolled in the 2007-08 academic year.

College a ‘lifetime' cost

"Paying for college is becoming one of the major costs across a lifetime,” said Tom Joyce, senior vice president of Sallie Mae, on a conference call for media Wednesday. According to the study, the average cost of college for last year alone was $14,628, ranging from $27,679 for four-year private institutions to $5,263 for two-year public schools.

"We need to get families away from a semester-by-semester fire drill in terms of how they pay,” Joyce said.

Rather than 529 plans, which only 9 percent of families used, parents' current income was the leading payment source last school year, with 38 percent of all families spending an average of $5,815. Upon graduation, Oklahoma students on average owe $17,250, according to the latest data available. Families, Joyce said, cannot expect to pay for college solely with scholarship and grant money, which covered only 15 percent of costs, the study found.

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