Highlights

Postsecondary students received $125.4 billion in grant aid to help pay for undergraduate and graduate education in 2016-17—74% more (in inflation-adjusted dollars) than a decade earlier. Even with an 11% increase in full-time equivalent (FTE) enrollment over 10 years, the $8,440 in grant aid per undergraduate was 61% higher and the $9,290 per graduate student was 39% higher than a decade earlier. (Table 3, Figure 1)

The sources of the grant aid supporting students have changed over time. In 2006-07, 43% of all grant aid came from the colleges and universities in which students enrolled and 28% came from the federal government. With the sharp increase in federal grants during the Great Recession, the federal share peaked at 44% in 2010-11, and the institutional share fell to 35%. But since then, institutional grant aid has increased rapidly, as both enrollment and federal grant aid have declined. In 2016-17, institutions provided 47% of all grant aid to postsecondary students. The impact of this $58.7 billion tuition discount is best understood in the context of the increases in published prices reported in Trends in College Pricing 2017.

Trends in Student Aid 2017 reveals a continuing decline in annual education borrowing, which fell (in inflation-adjusted dollars) in 2016-17 for the sixth consecutive year. Federal education loans per FTE undergraduate student followed the same pattern, but the average amount borrowed by graduate students increased for the second year in a row—to $17,710, almost four times as high as the $4,620 in federal loans per undergraduate student. (Figure 1)

Types Of Student Aid

In 2016-17, undergraduate students received an average of $14,400 per FTE student in financial aid: $8,440 in grants, $4,620 in federal loans, $1,280 in education tax credits and deductions, and $60 in Federal Work-Study (FWS).

(Figure 1, Table 3)

  • Graduate students received an average of $27,950 per FTE student in financial aid: $9,290 in grants, $17,710 in federal loans, $860 in tax credits and deductions, and $90 in FWS. (Figure 1, Table 3)
  • Undergraduate and graduate students received $239.1 billion in grants from all sources, FWS, federal loans, and federal tax credits and deductions. In addition, students borrowed about $12 billion from nonfederal sources. (Table 1)
  • Total federal grant aid doubled in inflation-adjusted dollars between 2006-07 and 2016-17. Pell Grants increased by 75% but fell from 76% to 66% of federal grants; veterans benefits, which rose by 300%, grew from 16% of federal grants in 2006-07 to 32% in 2016-17. (Table 1)
  • Federal loans to undergraduates increased by 23% between 2006-07 and 2016-17, rising by 61% over the first five years, but declining by 23% between 2011-12 and 2016-17. (Table 1A)
  • FWS and Federal Supplemental Educational Opportunity Grants (FSEOG) combined provided $1.5 billion in 2016-17—1% of total aid to undergraduate students. (Table 1A)

Sources Of Grant Aid

Grant aid per FTE undergraduate student increased by $1,020 (14%) in 2016 dollars between 2011-12 and 2016-17, after rising by $2,180 (42%) over the preceding five years. (Figure 1)

  • Grant aid per FTE graduate student increased by $1,730 (23%) in 2016 dollars between 2011-12 and 2016-17, after rising by $870 (13%) over the preceding five years. (Figure 1)
  • Almost all of the growth in grant aid between 2006-07 and 2016-17 was in the first half of the decade as FTE postsecondary enrollment increased by 18%. From 2011-12 to 2016-17, enrollment fell by 7% and grant aid increased by 8%, to $125.4 billion. (Table 3, Figure 3)
  • States provided grant aid averaging $790 per FTE undergraduate in 2015-16, $60 (in 2015 dollars) more than a decade earlier. State grant aid per student ranged from under $200 in 10 states to over $1,000 in 14 states. (Figures 19A and 20A)
  • Only institutional grant aid grew rapidly between 2011-12 and 2016-17. Colleges and universities increased their aid by 32%, from $44.4 billion (in 2016 dollars) in 2011-12 to $58.7 billion in 2016-17. Over these five years, federal grant aid declined by 15%, and grant aid from states and from employers and other private sources rose by less than 10%. (Figure 3)
  • Between 2009-10 and 2014-15, the increase in average institutional grant aid for first-time full-time students at private nonprofit master’s universities more than covered the increase in tuition and fees. Increases in grants covered 71% of the price increase at private doctoral and 97% at bachelor’s institutions. (Figure 21)
  • The increase in average institutional grant aid from 2009-10 to 2014-15 covered 70% of the increase in tuition and fees at public doctoral and 52% at master’s institutions. (Figure 21)
  • First-time full-time students at all types of private nonprofit four-year colleges and universities received more than 80% of their grant aid from their institutions in 2014-15. (Figure 14)
  • In 2014-15, 73% of first-time full-time undergraduates at private nonprofit doctoral universities, 92% at master’s universities, and 84% at bachelor’s colleges received institutional grant aid. In the public four-year sector, these percentages were 53% at doctoral universities, 45% at master’s institutions, and 38% at bachelor’s colleges. (Figure 21)

Pell Grants

Pell Grant expenditures rose from $15.2 billion (in 2016 dollars) in 2006-07 to $35.8 billion in 2011-12, but declined to $26.6 billion by 2016-17.

  • The number of Pell Grant recipients fell in 2016-17 for the fifth consecutive year, but the 7.1 million recipients represented a 38% increase from 5.2 million in 2006-07. (Figure 15B)
  • The number of undergraduate students rose by 1.2 million between 2006-07 and 2016-17. The number of Pell Grant recipients increased by 1.9 million; 32% of undergraduates received Pell Grants in 2016-17. (Figure 15A)
  • The average Pell Grant per recipient was $2,420 (in 2016 dollars) in 1996-97. It increased to $2,930 in 2006-07, peaked at $4,230 in 2010-11, and fell to $3,740 in 2016-17. (Figure 16)
  • The maximum Pell Grant covered 59% of average public four-year tuition and fees and 17% at private nonprofit four-year institutions in 2017-18. (Figure 17)

Distribution of Student Aid

In 2015-16, 47% of Pell Grant recipients were dependent students. Seventy-three percent of this group came from families with incomes below $40,000. (Figure 18B)

  • In 2015-16, 21% of Pell Grant recipients were over the age of 30. (Figure 18A)
  • The share of the savings from education tax credits and deductions going to households with adjusted gross income (AGI) below $25,000 rose from 15% in 2004 to 24% in 2014. The share going to those with AGI over $100,000 rose from 0% to 24%. (Figure 22A)
  • In 1981-82 and before, virtually all state grant aid was based on students’ financial circumstances. From 2004-05 to 2010-11, only 71% to 73% of state grant aid was need-based. In 2015-16, that percentage was 76%. (Figure 19A)
  • In 2015-16, half of the states considered students’ financial circumstances in awarding at least 95% of their state grants, but 16 states considered these circumstances when awarding less than half of their state aid. (Figure 19B)

Student Borrowing

In 2016-17, annual education borrowing declined for the sixth consecutive year. Students and parents borrowed $106.5 billion, down from $125.6 billion (in 2016 dollars) in 2010-11. (Figure 4)

  • Undergraduate students and parents borrowed 2% more (after adjusting for inflation) in 2016-17 than in 2006-07, but 18% less than in 2011-12. Graduate students borrowed 31% more in 2016-17 than in 2006-07, but 3% less than in 2011-12. (Tables 1A and 1B)
  • The share of federal loans going to graduate students increased from 31% to 39% between 2001-02 and 2016-17. The percentage of FTE postsecondary students who were graduate students increased from 13% to 14% over these 15 years. (Figure 7A)
  • Total annual borrowing of subsidized and unsubsidized loans from the Direct Loan program fell by 23% ($21.7 billion in 2016 dollars) between 2011-12 and 2016-17, but was still 23% ($13.2 billion) higher than in 2006-07. (Figure 4)
  • In 2016-17, 30% of undergraduates borrowed an average of $6,590 in subsidized and unsubsidized Direct Loans, a decline from 38% borrowing an average of $6,660 in 2011-12, but an increase from 2006-07, when 29% of undergraduates borrowed an average of $5,900. (Figures 9 and 7B)
  • The number of parents borrowing PLUS Loans in 2016-17 was 12% of the number of undergraduates taking subsidized and unsubsidized Direct Loans, but the average parent loan was $15,880, about 2.4 times as much as the average undergraduate student loan. Parents who took PLUS loans borrowed an average of 44% more in 2016-17 than in 2001-02. Average undergraduate student borrowing rose by 7% over these years. (Figure 7B)
  • Borrowing through the Grad PLUS program rose by 21% between 2011-12 and 2016-17. (Figure 4)
  • After increasing from $33.7 billion in 2001-02 (in 2016 dollars) to $45.7 billion in 2006-07, and to $75.1 billion over the next five years, total annual federal borrowing by undergraduates and their parents declined to $57.3 billion between 2011-12 and 2016-17. (Figure 7A)
  • Nonfederal education loans fell from about $24 billion (in 2016 dollars) in 2006-07 to $9 billion in 2011-12, and rose to about $12 billion in 2016-17. (Figure 4)

Student Debt

In 2017, 50% of the outstanding federal education loan debt is held by the 12% of borrowers owing $60,000 or more. (Figure 8)

  • In 2017, 57% percent of borrowers with outstanding federal education loan debt owe less than $20,000. (Figure 8)
  • In 2015-16, the 60% of bachelor’s degree recipients from public and private nonprofit institutions who borrowed graduated with an average of $28,400 in debt. Between 2010-11 and 2015-16, average debt among borrowers grew by $2,500 (to $27,000) at public four-year and by $1,200 (to $32,000) at private nonprofit colleges and universities. (Figure 12)
  • In 2017, 28% of borrowers in repayment on federal Direct Loans were enrolled in plans that limit their monthly payments to an affordable percentage of their incomes. These borrowers held 48% of outstanding loan balances. (Figure 10A)
  • Sixty percent of federal student loan borrowers entering repayment in 2010-11 and 2011-12 after earning a degree or certificate and 34% of noncompleters had paid down at least $1 of loan principal after three years. Repayment rates ranged from 23% for independent students in the for-profit sector to 68% for dependent students in the private nonprofit sector. (Figure 11A)