For the first time in a decade, scholarships and grants cover a third of college costs.

College isn’t getting cheaper, but we’re dealing with it better — and students increasingly have skin in the game. More teenagers are saving to pay for school on their own, and are splitting the costs with their parents this year.

That’s not all. A study that Sallie Mae releases every year cleverly titled “How America pays for college” revealed the largest share of tuition costs (35 percent) are being paid by scholarships and grants since 2008.

“Throughout our 10 years of conducting this study, families have consistently demonstrated they are determined to make college happen, and they’ve also become more value-conscious as they pay for higher education,” says Sallie Mae CEO Raymond J. Quinlan. “The value families place on a higher education degree is so strong that the majority expect their child to achieve a graduate degree.”

Forty-nine percent of families planned to use scholarships to help pay for school, and 47 percent said they were using grants.

Over half (59 percent) are planning to earn a graduate degree. This could be one reason why almost everyone (98 percent) found other ways to cut back to pay for their undergraduate degree.

Most (73 percent) chose an in-state school, half (50 percent) of students plan to live at home and one-fourth (26 percent) enrolled in an “accelerated program” where students take extra classes to graduate sooner. Over half (58 percent) eliminated a college due to costs.

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“For the past decade, ‘How America Pays for College’ has annually chronicled the ways in which students and parents are addressing the challenge of paying for college, and how it has very much become a family decision,” says Julia Clark, senior VP of Ipsos Public Affairs. “Their views and how they choose to pay for college reveal valuable insight into factors that have the potential to shape the future of higher education policies and practices.”

Students paying their way

Aside from high numbers of students and families using scholarships and grants to pay for college expenses, Sallie Mae’s study revealed that incoming students and parents planned to split the costs of tuition.

A recent study from TD Ameritrade shows similar trends. Two-thirds (66 percent) of teens expect to go to college at some point, and most (63 percent) are saving for their own education. One-third (32 percent) have already saved $1,000 and one in 10 already have $5,000 set aside for college.

“It’s fantastic to see a majority of college-bound teens saving for the related expenses. Clearly, teens understand the escalating costs of college and aren’t expecting their parents to foot the entire bill,” says TD Ameritrade’s Carrie Braxdale. “The harsh reality is that paying for college may be the toughest part of earning a degree. Teens and their parents shouldn’t wait to explore the various college savings plans available to them – start as early as possible.”

Could have invested in a 529 plan

Data shows that the use of a 529 plan college savings plan is decreasing. Had parents invested in these tax-free college savings accounts a decade ago, they would’ve been able to cash in on them now to use towards their future college student’s expenses.

Three out of every four (72 percent) Americans are unfamiliar with 529 plans, even though they’ve been around over 20 years now. Sallie Mae’s study has never shown a high usage of them. The rate peaked in the 2012-2013 report at 17 percent. This year’s study revealed the lowest rate (13 percent) of 529 plans used in the past five years.

“While most Americans agree that a college education is an important investment, they are not taking advantage of the tools that help make the most of their savings,” says Danae Domian, principal at Edward Jones. “The 529 college savings plan can be a great fit for many families as they prepare for their children’s future.”

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college savings, income, millennials, parents, save money, student loans

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Article last modified on August 14, 2017. Published by Debt.com, LLC .