Sallie Mae, America's largest student loan lender, has reported that families are cutting down on college costs.

An annual study released Monday by the lender shows that more families are becoming economically friendly when it comes to college expenses. A large amount of students in the past year have decided to choose less expensive schools to attend and there has been an increase in students living at home to save money.

The study shows that the average amount of money used on college per families who responded to the survey fell by five percent in the 2011-2012 school year. It also found that both parents and students responded that they make college decisions based on the cost of the school and whether they can afford to pay for it.

"This really reflects the economic conditions that we see today," said Sarah Ducich, senior vice president at Sallie Mae. "We are seeing families make adjustments saving more money and being more cost-conscious."

The survey was based on telephone interviews taken in April and May of 1,601 college undergraduates and parents.

More than half of the students surveyed lived off campus or at home while in college this year, an increase of close to nine percent from last year.