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Families are saving more for college this year, but it may not be enough.

Before the recession sent many people scrambling just to make mortgage and car payments, it wasn’t uncommon for families to put away money to help cover their kids’ future college costs. Five years ago, sixty-two percent of families were saving money. But the economic downturn changed that — last year, only about half of families could afford to put away money for higher education.

Now, a new report from Sallie Mae indicates that the drop-off has stemmed and the average family has a significantly bigger college savings pool than even just a year ago.


It wouldn’t be unreasonable, then, to think that more savings translates to a higher percentage of college costs covered, leaving a smaller gap that must be filled through student loans and scholarships.

It would be nice to imagine student loan debt in this country - which has ballooned beyond $1 trillion - slipping back to a more reasonable figure over the coming decade or so as the young children of the families saving now enroll in college, but that’s not likely.


Here’s why:

While college savings are up, so are college tuition and fees. The recession hit states hard, too, which meant cuts to higher education funding and less money for colleges. Students were saddled with much of the difference. States that experienced the worst budget woes - California, Florida and Arizona among them - jacked tuition up the fastest.


Not everyone has been able to save more money this year, either.

While overall college savings are up — with wealthy families predictably saving the most money and less wealthy families saving less money — average savings among low-income families are actually down 26 percent, $3,762 compared to last year’s $5,093. While it’s a given that poor families will be able to save less, it’s not a given that the amount they save will decline. The numbers indicate that income inequality seems to be a worsening issue when it comes to paying for college, with low-income families’ ability to save not rebounding to its previous state the way middle- and high-income families’ ability has after the recession.


Still, colleges tried to cut costs and in many cases succeeded, according to a new report from the Lumina Foundation. They opened large online courses. They installed energy-efficient, cost-saving appliances and trimmed maintenance costs. They turned to open-source textbooks.

And it worked. Overall, during the recession, colleges actually managed to bring in more revenue through tuition raises and enrollment increases than they lost from state funding.


So why the heck are costs for students still going up?

While the sheer dollar amount colleges pulled in went up, the increase in enrollment was significant enough that the revenue per student declined. In other words, schools had to figure out how to do with less money per student than in previous years.


Another reason for the high cost is that schools operate like businesses.

In the same way that corporations trimmed staffs during the recession and then kept teams lean on purpose when they realized the work was still being accomplished, colleges will increase tuition as much as they think student finances and potential competition will permit, and then pass the savings along to faculty through salary increases, use the money to decrease class size, perform upgrades, or bolster athletic programs, the report notes.


While colleges haven’t been passing savings on to students, there’s room for hope. There are pay-it-forward models and Silicon Valley startups contemplating creative solutions. Technological advances increasingly allow for quality online alternatives to the standard college experience, which gives students the flexibility to work while they’re in school. Politicians from President Obama to potential presidential contender Sen. Marco Rubio (R-Florida) are focused on making college more affordable. It’s an issue that’s gaining traction outside the walls of traditional colleges, and as reluctant as the schools are to change, they may not have the option to promote the status quo much longer.

Emily DeRuy is a Washington, D.C.-based associate editor, covering education, reproductive rights, and inequality. A San Francisco native, she enjoys Giants baseball and misses Philz terribly.