Trends in Student Aid
Trends in Student Aid, an annual College Board publication since 1983, is a compendium of detailed, up-to-date information on the funding that is available to help students pay for college. This report documents grant aid from federal and state governments, colleges and universities, employers, and other private sources, as well as loans, tax benefits, and Federal Work-Study Assistance. It examines changes in funding levels over time, reports on the distribution of aid across students with different incomes and attending different types of institutions, and tracks the debt students incur as they pursue the educational opportunities that can increase their earnings, open doors to new experiences, and improve their ability to adapt to an ever-changing society.
- In 2011-12, undergraduate students received an average of $13,218 per full-time equivalent (FTE) student in financial aid, including $6,932 in grant aid from all sources, and $5,056 in federal loans.
- Federal grant aid almost tripled in constant dollars between 2001-02 and 2011-12, increasing from 20% to 26% of the total 185.1 billion in undergraduate aid.
- Only 2% of students who first enrolled in 2003-04 had borrowed more than $50,000 from federal and nonfederal sources combined by 2009. Over 40% did not borrow and another 25% borrowed $10,000 or less.
Student financial aid includes grants, federal loans, work-study and tax benefits. Federal and state governments, colleges and universities, employers and other private entities provide financial aid to both undergraduate and graduate students.
The federal government provides grant aid, most of which is based on students' financial circumstances. It also provides education loans for students and parents and work-study funds that help to pay the wages of some student workers. Tax credits and deductions also subsidize students and families paying for college.
From the student's perspective, grant aid is the most desirable form of financial aid. It is awarded before the tuition bill has to be paid and does not have to be repaid. The federal government and colleges and universities are the largest sources of grant aid, but states and employers and other private entities also provide significant amounts of grant aid.
The federal government provides education loans to both students and parents. These loans are now funded directly by the government, but until July 2010 some were funded by private lenders and guaranteed by the federal government. Federal loans carry fixed interest rates and a variety of repayment protections, but this is not the case for the nonfederal loans on which some students rely. Student loans make college possible for many students, but rising education debt levels are a growing concern.
The federal government provides education tax credits and deductions that reduce the tax bills of parents and students paying for postsecondary education. It also exempts from taxation the earnings on specified savings vehicles earmarked for paying for college.