By Joe Mathieu, WBZ NewsRadio 1030

BOSTON (CBS) — This might help people understand why the debate around student loan interest rates has been so heated in Washington.

More and more families are relying on loans to send the kids to college.

I’m sure I don’t need to tell you how expensive college is. But a new report from lending giant Sallie Mae shows us how American families are coping.

Parents are contributing less of their own income and savings and relying more on grants and scholarships, with two thirds of families using them to make-up the difference.

That’s an all time high. But it’s not high enough to get students themselves off the hook.

More and more of them are reaching into their own pockets – contributing to 18% of the cost, according to the report obtained by USA Today.

And as tuition keeps rising more families will rely on college savings plans like 529s this year. That’s more than in any other year.

This is a story that affects so many people and it’s not going away. Not until college costs level-off or actually decline (don’t laugh) if they ever do. And I don’t know anyone who is predicting that.

Long gone are the days when students simply applied to the best schools they could get into.

Now they just apply to the schools they can afford.

Sallie Mae found 70% of families eliminated schools on their list this year because of costs – that’s up from 58% in 2008.

So two things could happen here. The market will either correct itself and colleges will not be able to keep hiking tuition. Or we’ll have an even more pronounced class structure in our nation’s schools – and that should be a concern for everyone.

Follow Joe on Twitter @joemathieuwbz

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