College & Workforce Readiness

More Students Relying on Federal Student Aids and Loans

By Caralee J. Adams — August 20, 2013 2 min read
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More students are relying on financial aid, particularly from the federal government, to cover the increasing cost of college.

In the 2011-12 school year, 71 percent of all undergraduates received some type of financial aid compared with 66 percent four years earlier, a report released today from the National Center for Education Statistics shows.

The National Postsecondary Student Aid Study, compiled every four years, explains that much of the expansion was linked to federal financial aid, which helped 57 percent of students pay for college in 2011-12, up from 47 percent four years earlier.

Federal Pell grants went from assisting 28 percent to 42 percent of undergraduates in that same period. The grants are targeted at students in families where the household income is $30,000 or less. The average federal grant awarded was $3,500.

Borrowing from the federal student-loan program also increased by 5 percent in the same stretch. Students who took out loans borrowed an average of $7,100 in 2011-12.

U.S. Secretary of Education Arne Duncan said in statement that the findings confirm the important role of federal financial aid in providing students with the opportunity to pursue higher education, but that the data also show increasing federal student aid alone will not control the cost of college.

“All of us share responsibility for ensuring that college is affordable,” said Duncan. “We need state policymakers and individual colleges and universities to do their part in taking action against rising college tuition.”

Just 15 percent of undergraduates were awarded state grants (average of $2,600) and 20 percent were given institutional grants (average $6,400) in 2011-12. The NCES notes that those contributions were about the same four years ago, with state aid dipping slightly. The financial downturn led many states to cut higher education budgets and colleges to raise tuition in response.

Overall, 59 percent of students received some form of a grant, 42 percent took out student loans, 6 percent had work-study jobs, and 5 percent had parents who took out federal Direct PLUS Loans. The NCES found the average student received $10,800 in aid in 2011-12, an increase from $9,100 in 2008-09.

NCES Commissioner Jack Buckley said in a press call that the rise in college costs, borrowing, and reliance aid follows a trend going back more than a decade and will likely continue. “Although the president [Obama] is committed to reining in the cost of college, the postsecondary marketplace will take a while to react,” he said Monday. “We need to figure how to slow the rise in tuition. Some institutions have figured out ways to cut costs and others haven’t taken such an aggressive position.”

On Thursday, the President plans to travel to New York and Pennsylvania to give speeches about efforts to address college affordability.

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A version of this news article first appeared in the College Bound blog.