At a Glance

Highlights

Total Aid

In 2007-08, undergraduate students received an average of $8,896 in financial aid per full-time equivalent (FTE) student, including $4,656 in grant aid and $3,650 in federal loans. Graduate students received an average of $20,320 in aid per FTE student, including $6,948 in grant aid and $12,746 in federal loans.

Both total grant aid per undergraduate and total federal loans per undergraduate increased by about 5.5% in 2007-08, after adjusting for inflation.
During the 2007-08 academic year, more than $143 billion in financial aid was distributed to undergraduate and graduate students in the form of grants from all sources, federal loans, federal work-study, and federal tax credits and deductions. In addition, students borrowed about $19 billion from state and private sources to help finance their education.
Total student aid increased by about 84% in inflation-adjusted dollars over the decade from 1997-98 to 2007-08. Total FTE postsecondary enrollment increased by 28% over the decade.
Loans have declined from 75% to 70% of total federal aid over the decade. Federal education tax benefits, introduced in 1998-99, now constitute 7% of federal aid to postsecondary students.
In 2006-07, 31% of Pell Grants went to the one-third of undergraduate students enrolled in public two-year colleges. Thirty-four percent went to public four-year college students (42% of undergraduate enrollment), 16% to private not-for-profit college students (19% of undergraduate enrollment), and 19% to students at for-profit institutions (7% of undergraduate enrollment).
In contrast, 8% of campus-based funds went to community college students, 39% to public four-year college students, 46% to those enrolled in private not-for-profit institutions, and 7% to students at for-profit institutions.

Grant Aid

Average grant aid per undergraduate FTE increased by $1,494 (in constant 2007 dollars) from 1997-98 to 2007-08. This amount is about two-thirds of the dollar increase in average tuition and fees at public four-year institutions and one-quarter of the increase in average tuition and fees at private not-for-profit institutions over the decade.

After holding steady at 5.2 million for two years, the number of Pell Grant recipients rose by 5%, to 5.4 million in 2007-08, resulting in a 45% increase over the decade.
Total Pell Grant expenditures increased by 76% in constant dollars from 1997-98 to 2004-05. Following a 9% decline from 2004-05 to 2006-07, the 2007-08 increase returned Pell dollars to their 2003-04 level.
The percentage of tuition and fees and room and board at the average public four-year college covered by the maximum Pell Grant increased from 36% to 41% between 1997-98 and 2002-03, but declined to 30% by 2007-08 before increasing to 33% in 2008-09. The percentage of tuition and fees and room and board at the average private four-year college covered by the maximum Pell Grant increased from 14% to 16% between 1997-98 and 2002-03, but declined to 13% by 2007-08, before returning to 14% in 2008-09.
In 2007-08, the second year of the Academic Competitiveness Grant (ACG) program, 456,000 students received awards averaging $768. Seventy-two thousand students received SMART Grants averaging $3,194.

In 2007-08, state grant aid funds increased by about 3% in constant dollars. After increasing rapidly from less than 10% in 1992-93 to 27% in 2004-05, the proportion of state grant dollars not based on need continues to rise slowly, and in 2006-07 was about 28%.
Institutions provide the largest source of grant aid, with these discounts to students comprising 21% of student aid to undergraduates and 17% of graduate aid in 2007-08. Institutional grants represent 42% of all grant aid, while federal grants are 31% of the total.
Estimates from the College Board’s Annual Survey of Colleges indicate that the proportion of institutional grant aid at public four-year colleges and universities going to meet financial need increased from 35% to 44% between 2000-01 and 2006-07. At private four-year institutions, this proportion remained steady at about 70% over this time period.
Among private institutions, higher proportions of grant dollars go to meet need at higher-priced colleges and universities and, on average, grant aid covers a higher fraction of tuition and fees at these institutions than at lower-priced private institutions.

Student Borrowing

After two years of slow growth, federal education loan volume increased by 6% in inflation-adjusted dollars between 2006-07 and 2007-08. Subsidized Stafford Loans increased by 11%, unsubsidized loans grew by 6%, and PLUS Loans grew by 1%. Perkins Loans declined by 33%, to $1.1 billion.

The rapid growth in student borrowing from nonfederal sources slowed in 2006-07, and in 2007-08, the volume of these private loans declined by about 1% in constant dollars.
Subsidized Stafford Loans declined from 52% of total education loans in 1997-98 to 34% in 2007-08.
Over half of Stafford Loan borrowers in 2007-08 received both subsidized and unsubsidized Stafford Loans.
Total borrowing through the William D. Ford Federal Direct Student Loan Program (FDSLP) increased by 7% in constant dollars in 2007-08 after three years of decline. Over the decade, the volume of Stafford and PLUS Loans disbursed through this program increased by 2%.
Total borrowing through the Federal Family Education Loan Program (FFELP) increased by 8% in constant dollars in 2007-08. Over the decade, the volume of Stafford and PLUS Loans disbursed through this program increased by 111%.
Estimates from the Annual Survey of Colleges indicate that for the approximately 60% of 2006-07 bachelor’s degree recipients who graduated with debt, average total debt was about $22,700.

Other College Funding

In 2007-08, 8.5 million taxpayers benefited from federal education tax credits and deductions and 5.4 million students received Pell Grants. In contrast, 1.3 million undergraduates received Federal Supplemental Educational Opportunity Grants (FSEOG) and only 792,000 students received Federal Work-Study support.

After increasing at a rate of about 40% a year in constant dollars for a decade, total assets in 529 college savings accounts declined by 2% in 2008.
Federal education tax credits and deductions generated $6.5 billion in savings for taxpayers in 2006. About 41% of the benefit of the tax credits went to taxpayers with incomes below $50,000. Only about 11% of the benefit of the tuition tax deduction went to taxpayers with incomes below $50,000, while 59% went to those with incomes between $100,000 and $160,000.