Many Americans are shying away from high-priced institutions for higher education, with two-thirds of families eliminating universities or colleges during the 2012-13 application process based on affordability, according to student lender Sallie Mae.

The number of applicants avoiding more expensive institutions was up nearly 10% from 2009, according to Sallie Mae's annual "How America Pays for College" report.

Students and their families spent $21,178, including loans, on average, for total college costs last year, down from a peak of $24,097 in 2010, according to the survey released last week. That drop does not reflect lower college costs; students saved by choosing less-expensive schools, living at home or working more to obtain scholarship and grant money.

As families pay less of the bill for college, scholarships and grants are filling the gaps, covering about 30% of costs during the most recent academic year. The average amount a student received in scholarships and grants was $6,355. Overall, parents' average out-of-pocket spending declined to $5,727 in 2013, compared with $8,752 in 2010, according to the Sallie Mae report.

While more aid is available, students are working harder to earn it. "Families with incomes $35,000 to $100,000 are investing real time into seeking out scholarships," says Sarah Ducich, Sallie Mae's senior vice president for public policy.

Student borrowing pays for an estimated 18% of college costs, while the remainder of funds comes from student savings or income, parent borrowing or relatives and friends. Ducich notes that while fewer students in 2013 borrowed for school, the ones still borrowing were taking out larger loans.

College seniors are the most likely to borrow, usually after all other financial resources are tapped. "They're borrowing to finish, and that's not necessarily a bad thing," Ducich added.

It also appears conversations about cost are starting soon. A survey by the Private College 529 Plan, which lets participants prepay tuition at private colleges and universities, found 66% of teenagers ages 13 to 17 had discussed savings for college with their parents. More than half had set aside funds for school, while 78% had researched how best to save.

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