Student-Aid Value Found Eroded by Cuts, Cost Increases

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Washington--After experiencing dramatic growth in the 1960's and 1970's, the total real value of student aid dropped by 21 percent during the early 1980's, a new report from the College Board has found.

For families, that reduction, combined with declining rates of income growth and rising tuition costs, means that it has become relatively harder to finance a college education, the report found.

"The early 1980's have seen a major change in the relationship of costs, income, and aid," the report says. "Adjusted for inflation, costs have increased but income and aid per [full-time] student have not. Thus, in contrast to what can be said generally about the last two decades, college has become relatively more difficult for families to afford in the 1980's."

The report, "Trends in Student Aid: 1963-1983," summarizes 20 years of data on aid to college students. Written by Donald A. Gillespie, a policy analyst in the board's Washington office, and Nancy Carlson, a former research assistant with the organization, the analysis traces the growth in aid and compares it to rates of inflation, college costs, family income, enrollment, and other factors.

Total federal student aid for the academic year 1983-84 is estimated at $16.1 billion, down $2 billion from its 1981-82 peak. Most of the decline comes from the phasing out of students' Social Security benefits, new restrictions, as of 1981, on eligibility for Guaranteed Student Loans, and the shrinking number of veterans using G.I. benefits.

Even with the reduction in funds, however, the federal government remains the largest provider of aid to college students. In the early 1960's, less than 40 percent of such aid came from the federal government; today, that figure stands at almost 80 percent, the report concludes.

Between 1963-64 and 1980-81, according to the analysis, there was a 378-percent real increase in total aid for each full-time student. Most of the growth occurred before 1973-74, the report found.

The analysis also shows major shifts in the kind of aid most commonly provided.

From 1970-71 to 1975-76, the proportion of total aid made in the form of grants grew from 66 percent to 80 percent. During the same period, the proportion awarded as loans dropped from 29 percent to 17 percent.

That pattern changed in the mid-1970's, the analysis found. By 1983-84, government support was evenly divided between loans and grants--each amounting to about 48 percent of the total aid program--with the remainder in the form of work-study support.

The report is available for $8 from College Board Publications, Box 886, New York, N.Y. 10101.--sw

Vol. 03, Issue 18, Page 6

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