After increasing by 18% (in inflation-adjusted dollars) between 2007-08 and 2010-11, the total amount students borrowed in federal and nonfederal education loans declined by 13% between 2010-11 and 2013-14. Growth in full-time equivalent (FTE) postsecondary enrollment of 16% over the first three years, followed by a decline of 4% over the next three years, contributed to this pattern. However, borrowing per student, which rose by 2% between 2007-08 and 2010-11, declined by 9% over the most recent three years. The data in Trends in Student Aid 2014 provide details on these changes, as well as changes in grants and other forms of financial aid undergraduate and graduate students use to finance postsecondary education.

Types of Student Aid

Total loans declined as a percentage of all student aid plus nonfederal loans from 47% in 2010-11 to 43% in 2013-14.  This percentage was 51% in 2003-04 and 55% in 2007-08.
  • Grants increased as a percentage of all student aid plus nonfederal loans from 45% in 2010-11 to 49% in 2013-14. This percentage was 43% in 2003-04 and 41% in 2007-08. 
  • In 2013-14, undergraduate and graduate students received $238.3 billion in grants from all sources, Federal Work-Study (FWS), federal loans, and federal tax credits and deductions. In addition, students borrowed about $10 billion from private, state, and institutional sources. 
  • In 2013-14, undergraduate students received an average of $14,180 per FTE student in financial aid, including $8,080 in grants from all sources, $4,840 in federal loans, $1,195 in education tax credits and deductions, and $65 in FWS.
  • Graduate students received an average of $26,200 per FTE student in financial aid, including $8,540 in grants, $16,080 in federal loans, $1,530 in education tax credits and deductions, and $50 in FWS.
  • The American Opportunity Tax Credit increased the savings for college students and their parents through education tax credits and deductions from $7.2 billion (in 2012 dollars) in 2008 to $17.4 billion in 2012.

Sources of Grant Aid

Grant aid per FTE undergraduate student increased by 39% between 2007-08 and 2010-11, and by 8% between 2010-11 and 2013-14.
  • Grant aid per FTE graduate student increased by 7% between 2007-08 and 2010-11, and by 13% between 2010-11 and 2013-14.
  • Federal grant aid rose from 30% of all grants to postsecondary students in 2007-08 to 45% in 2010-11, and was 40% of the total in 2013-14.
  • Pell Grants for undergraduate students increased from $16.5 billion (in 2013 dollars) in 2007-08 to $38.2 billion in 2010-11. These grants totaled $32.7 billion in 2011-12, and rose to $33.7 billion in 2013-14. 
  • Veterans’ education benefits for undergraduate and graduate students increased from $4.6 billion (in 2013 dollars) in 2007-08 to $11.9 billion in 2010-11. These awards totaled $13.2 billion in 2012-13 and an estimated $13.8 billion in 2013-14.
  • In 2013-14, 40% of all grant aid came from the federal government, 39% from colleges and universities, 13% from employers and other private sources, and 8% from state governments.
  • Federal grant aid to postsecondary students increased by 128% in constant dollars between 2007-08 and 2010-11. Although the total declined by 7% over the three-year period from 2010-11 to 2013-14, it increased by 3% between 2012-13 and 2013-14.
  • State student grant aid, almost all of which is for undergraduate students, increased by 10% in constant dollars between 2007-08 and 2010-11 and declined by 5% between 2010-11 and 2013-14, including a 3% decline in 2013-14.
  • In 2012-13, state grant aid per FTE undergraduate student ranged from under $200 in 14 states to over $1,000 in 10 states.
  • Grant aid from colleges and universities in the form of discounts to students grew from an estimated $31.5 billion (in 2013 dollars) in 2007-08 to $41.4 billion in 2010-11, and to about $48.2 billion in 2013-14.

Pell Grants

The number of students receiving Pell Grants increased from 3.8 million in 1993‐94 to 5.1 million in 2003‐04, and to 9.2 million in 2013‐14.
  • Total Pell Grant expenditures increased from $16.1 billion (in 2013 dollars) in 2003-04 to $38.2 billion in 2010-11, but declined to an estimated $33.7 billion by 2013-14. 
  • Only undergraduate students who have an expected family contribution of zero and enroll full time/full year receive the maximum Pell Grant. In 2012-13, 27% of recipients received the maximum $5,550 in Pell funding, up from 22% in 2002-03. 
  • The average Pell Grant per recipient was $2,435 (in 2013 dollars) in 1993-94, $3,141 in 2003-04, and $3,678 in 2013-14. The average grant peaked at $4,107 (in 2013 dollars) in 2010-11.
  • Despite increasing by 12% in inflation-adjusted dollars over the decade, the maximum Pell Grant covered 79% of average public four-year tuition and fees in 2004-05, but only 63% in 2014-15. It covered 20% of average private nonprofit four-year tuition and fees in 2004-05, and 18% in 2014-15. 
  • The percentage of undergraduate students receiving Pell Grants increased from 25% in 2003-04 to 38% in 2013-14.

Distribution of Student Aid

In 2013-14, undergraduate students received 54% of their funding in the form of grants, 37% as loans (including nonfederal loans), and 9% in a combination of tax credits or deductions and Federal Work‐Study. For graduate students, these percentages were 32%, 62%, and 6%, respectively.
  • In 2012-13, 42% of Pell Grant recipients were dependents of their parents for financial aid purposes, and 61% of these dependent students came from families with incomes of $30,000 or less. 
  • In 2012-13, 24% of all Pell Grant recipients were over the age of 30.
  • In 2012, 24% of the savings from education tax credits and 56% of the tuition tax deduction benefit went to households with an adjusted gross income (AGI) over $100,000. 
  • While 24% of the savings from tax credits went to households with AGI below $25,000 in 2012, only 5% of the tax deduction benefit went to households in this income category. 
  • In 1993-94, only 9% of all state grant aid for undergraduates was awarded without regard to the students’ financial circumstances. By 2003-04, this percentage had risen to 26% 
    and in 2012-13 it was 25%.
  • In 2011-12, about two-thirds of the institutional grant aid at private nonprofit four-year institutions with published tuition and fees of at least $36,241 was allocated on the basis of financial need. Smaller percentages of institutional grants are need-based at institutions with lower prices.
  • In 2011-12, full-time public four-year dependent students from families in the lowest income quartile received only 32% ($410) more on average in institutional grant aid than those from families in the highest income quartile, but they received an average of about $7,200 in state and federal grant aid, compared to $500 for the highest-income students. As a result, they received about four times as much in total grant aid as those in the highest income quartile.
  • In 2013-14, about 48% of the institutional grant aid at public four-year institutions and about 70% at private nonprofit institutions went to meet financial need.

Student Borrowing

In 2013-14, total annual education borrowing declined for the third consecutive year. Overall, students borrowed 13% less in 2013-14 than in 2010-11.
  • Over the past decade, the total number of federal Stafford Loan borrowers increased by 43%, from 6.5 million in 2003-04 to 9.3 million in 2013-14. Average Direct Loans per borrower increased by 3%, from $8,147 (in 2013 dollars) in 2003-04 to $8,356 over the decade.
  • In 2013-14, undergraduate borrowers took Stafford Loans averaging $6,670, 10% less than three years earlier, after adjusting for inflation.
  • The percentage of undergraduate students taking federal subsidized or unsubsidized student loans increased from 27% in 2003-04 to 33% in 2013-14. Just 6% of students (and 17% of borrowers) took only subsidized loans.
  • Total borrowing from the federal Direct Subsidized and Unsubsidized Loan programs fell by 18% ($16.6 billion in 2013 dollars) between 2010-11 and 2013-14. Total borrowing from the PLUS program for parents of undergraduate students fell by 12% ($1.4 billion), but Grad PLUS borrowing increased by 1% 
    ($56 million).
  • Nonfederal education loans grew from an estimated $13.7 billion (in 2013 dollars) in 2003-04 to $26.0 billion in 2007-08. In 2013-14, student loan volume from banks, credit unions, states, and institutions was about $10.0 billion.

Student Debt

About 60% of students who earned bachelor’s degrees in 2012-13 from the public and private nonprofit institutions at which they began their studies graduated with debt. They borrowed an average of $27,300, an increase of 13% over five years and 19% over a decade.
  • In 2013, 40% of borrowers with outstanding education debt owed less than $10,000, and another 29% owed between $10,000 and $25,000; 4% of borrowers owed $100,000 or more. This debt includes borrowing for both undergraduate and graduate studies. 
  • In 2014, 2.5 million federal Direct Loan borrowers were in repayment plans that limit their payments to a specified percentage of their incomes. These borrowers constituted 14% of those in repayment plans; they held 28% of the total outstanding debt in repayment plans.
  • In the third quarter of 2013-14, 9% of borrowers with outstanding Federal Direct Student Loans were in default. These borrowers held 5% of total outstanding debt.
  • For-profit institutions accounted for 32% of those who entered repayment in 2010-11, and 44% of those who defaulted by the end of September 2013.