FAMILIES CHANGE HOW THEY PAY FOR COLLEGE
Newark, Del. - Grants and scholarships covered 33 percent of college costs in 2010-2011, up from 23 percent the previous year, according to a study by student loan provider Sallie Mae and research firm Ipsos Public Affairs.
The percentage of families who received grants and scholarships grew substantially, from 55 percent in 2009-2010 to 67 percent in 2010-2011. The majority of the increase occurred among middle- and high-income families.
More families filed the Free Application for Federal Student Aid, jumping from 72 percent in the 2010 report to 80 percent in the 2011 report. Most of the increase also came from middle- and high-income families.
The study found that virtually all the 1,600 families interviewed said that they were adopting cost-saving measures.
401(K) EQUITIES INVESTORS SAW 50% GROWTH
A new study from Fidelity Investments found that 401(k) plan participants who changed their equity allocations to zero percent between Oct. 1, 2008, and March 31, 2009, and maintained this allocation through June 30 of this year, experienced an average increase in account balance of only 2 percent through June 30.
On the other hand, plan participants who dropped to zero percent equity but then returned to some level of equity allocation after that market decline saw an average account balance increase of 25 percent, in sharp contrast to those who stayed with an asset allocation strategy inclusive of equities. These participants realized an average account balance increase of 50 percent during the same period.
Fidelity also examined participants who stopped contributing to their 401(k)s during the same market decline of 2008-2009. They experienced an average increase in their account balances of 26 percent through the end of the second quarter, compared to 64 percent for participants who continued making regular contributions.
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