Trends In Student Aid
Trends in Higher Education Series
2007
Trends in
Student Aid
Executive Summary
Total Aid
• In 2006-07, the first year of the Academic Competitiveness
Grant (ACG) program, 400,000 students received awards aver-
During the 2006-07 academic year, more than $130 bil ion in financial
aging $850. Eighty thousand students received SMART Grants
aid was distributed to undergraduate and graduate students in the
averaging $3,875.
form of grants from al sources and federal loans, work-study, and
tax credits and deductions. In addition, these students borrowed more
• Institutions provide the largest source of grant aid, with these
than $18 bil ion from state and private sources to help finance their
discounts to students comprising 21 percent of student aid to
education.
undergraduates and 17 percent of graduate aid. Institutional
grants represent 41 percent of all grant aid, while federal grants
• Total student aid increased by about 82 percent in inflation-
are 31 percent of the total.
adjusted dollars over the decade from 1996-97 to 2006-07. Aid to
undergraduate and graduate students increased at similar rates.
Student Borrowing
• Loans have declined from 76 percent to 69 percent of total federal
aid over the decade, as education tax credits and deductions have
Stafford Loan volume did not keep pace with inflation between 2005-
come to constitute 7 percent of federal aid to students.
06 and 2006-07. Increases in student borrowing occurred in the new
Graduate PLUS (Parent Loans for Undergraduate Students) program
• The increase in grant dollars between 1996-97 and 2006-07
and in nonfederal loans.
covered an average of about a third of the increase in private
college tuition and fees and half of the increase in average
• Undergraduate federal borrowing grew 51 percent in inflation-
public four-year college tuition and fees. The increase in total
adjusted dol ars over the decade from 1996-97 to 2006-07,
aid, including both grant aid from all sources and federal loans,
but declined between 2005-06 and 2006-07. However, private
covered about two-thirds of the increase in tuition and fees
undergraduate loans grew 12 percent, to $14.5 bil ion, and
at private four-year colleges and almost all of the increase in
borrowing through state programs grew 20 percent, to $1.1 bil ion.
tuition and fees (but none of the additional increase in costs of
• Real growth in both subsidized and unsubsidized Stafford bor-
attendance) at public four-year institutions.
rowing in recent years has been the result of increases in the
number of loans issued, not the average size of the loans.
Grant Aid
• Subsidized Stafford Loans declined from 54 percent of total
Grant aid from all sources averaged $4,648 per ful -time equivalent
education loans in 1996-97 to 32 percent in 2006-07.
(FTE) student—$4,218 per undergraduate (90 percent of all FTE
• Stafford Loan borrowing through the William D. Ford Federal
students) and $8,343 per graduate student (10 percent of all FTE
Direct Student Loan Program (FDSLP) declined by $1 billion
students).
in 2006 dollars between 1996-97 and 2006-07. Stafford Loan
• Total grant dollars to undergraduates increased by 7 percent
borrowing through the Federal Family Education Loan Program
in inflation-adjusted dollars between 2005-06 and 2006-07,
(FFELP) increased by $17 billion in the same time period.
and grant dollars to graduate students increased slightly more.
• While undergraduate borrowing in the PLUS (Parent Loans for
Grant aid per student increased by 4 percent over the same
Undergraduate Students) program did not keep up with inflation
period.
between 2005-06 and 2006-07, total PLUS borrowing grew
• The number of Pell Grant recipients increased by 41 percent,
19 percent in inflation-adjusted dollars, as graduate students
from 3.7 million to 5.2 million, over the decade from 1996-97 to
became eligible for these loans.
2006-07, after growing 38 percent the preceding decade.
• Graduate students had access to PLUS Loans for the first time
• In 2005, 36 percent of all Pell Grant recipients were age 26 or
in 2006-07 and borrowed almost $2 billion from this program,
older and 59 percent were independent of their parents. Among
with 127,000 students borrowing an average of $15,747 each.
dependent Pell Grant recipients, two-thirds came from families
Graduate borrowing from private sources declined about 10
with incomes below $30,000.
percent or $280 million.
• Total Pell Grant expenditures, which rose by 73 percent in
inflation-adjusted dollars over the decade from 1996-97 to 2006-
Other College Funding
07, declined in real terms for the second year in a row in 2006-07,
• Assets in 529 college savings plans grew from $2.4 billion at the
by $141 million in 2006 dollars. The highest annual expenditures
end of 1996 to $15.1 billion in 2001 and $122 billion in 2007. The
were in 2004-05, when total Pell Grants equaled $14 billion in
10 million accounts hold an average of $12,757. Fourteen percent
2006 dollars.
of the funds are in prepaid tuition plans and the remainder are in
• The average Pell Grant per recipient, $2,494 in 2006-07, was 23
standard state-sponsored savings accounts.
percent higher in inflation-adjusted dollars than it had been a
• Federal education tax credits and the federal tuition tax
decade earlier, but 5.3 percent lower than it was in 2001-02.
deductions generated $5.9 billion in savings for taxpayers in
• The percentage of tuition and fees and room and board at the
2006. About 42 percent of the benefit of the tax credits went
average public four-year college covered by the maximum Pell
to taxpayers with incomes below $50,000. Only 17 percent of
Grant declined from 35 percent in 1996-97 and 42 percent in
the benefit of the tuition tax deduction went to taxpayers with
2001-02 to 32 percent in 2006-07. The amount covered in 1986-87
incomes below $50,000; 47 percent went to those with incomes
was 52 percent.
between $100,000 and $160,000.
Trends in Higher Education Series
Contents
Executive Summary ...............................................................................2
Total Funding by Type .........................................................................15
Introduction ............................................................................................4
Total Aid per Full-Time Equivalent Student ....................................16
Total Student Aid ....................................................................................6
State Grants to Undergraduate Students ..........................................17
Total Student Aid—Adjusted for Inflation .........................................7
Pell Grants .............................................................................................18
Total Undergraduate and Graduate Student Aid by Type ...............8
Institutional Grants: Private Institutions .........................................20
Total Undergraduate Student Aid—Adjusted for Inflation .............9
Institutional Grants: Public Institutions ..........................................21
Federal Aid Recipients .........................................................................10
Student Employment ............................................................................22
Undergraduate and Graduate Borrowers .........................................11
Changes in Tuition and Fees, Income, and Aid ...............................23
Types of Grants and Loans ..................................................................12
College Savings Plans ...........................................................................24
Student Borrowing ...............................................................................13
Federal Education Tax Credits and Tuition Deductions................25
Distribution of Federal Aid by Sector ...............................................14
Notes and Sources .................................................................................26
Figure 1: Ten-Year Trend in Funds Used to Finance Postsecondary Education Expenses in Constant (2006)
Dol ars (in Bil ions), 1996-97 to 2006-07
$160
$140
Nonfederal Student Loans
Education Tax Benefits
Federal Parent Loans (PLUS)
$120
and Grad PLUS Loans
Unsubsidized Stafford Loans
$100
$80
Subsidized Stafford Loans
06) Dollars in Billions
Private and Employer Grants
$60
Institutional Grants
Constant (20 $40
Federal Pell Grants
$20
State Grants
Other Federal Programs
$0
Federal Campus-Based Programs
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07
Academic Year
Note: See Notes and Sources for lists of programs included in Other Federal Programs.
Over the decade from 1996-97 to 2006-07, federal grant aid to undergraduate and graduate students
increased by 82 percent in inflation-adjusted dollars, and federal loans increased by 61 percent.
However, total federal aid declined from 66 percent to 58 percent of the total funds used to help
finance postsecondary education, as alternative private loans grew from 3 percent to 12 percent.
Trends in Student Aid 2007
Introduction
Trends in Student Aid presents annual data on the amount of bank loans for education are not subsidized at all. Their value is
financial assistance—grants, loans, work-study, and education tax only in providing liquidity for students who have no other means
benefits—distributed to students to help them pay for postsecondary of accessing funds. Between these two extremes are unsubsidized
education. The College Board began this data series in 1983 to Stafford Loans, which are federally guaranteed, but accrue interest
track trends in financial aid from federal, state, and institutional from the time they are issued.
sources. Much of the data reported here relate to aggregate amounts
Because of this continuum of funding types, we use two different
of student aid. Because of increases in the price of college, growth measures to describe how students pay for college. We define student
of enrollments in higher education over time, and changes in the aid as grants from all sources, loans and work-study assistance
structure of aid programs, increases in these totals do not necessarily from the federal government, and federal education tax credits and
make college more affordable for individual students. Focusing on deductions. We have excluded private loans from all calculations
average amounts of aid available and on the distribution of that aid identified as student aid. However, we combine private education loans
among students in different circumstances is particularly important with student aid when we describe student borrowing and funding.
for evaluating the adequacy of student funding.
As the price of attending college has increased and family
Trends in Col ege Pricing, released together with this report, incomes, grant aid, and federal loans have failed to keep pace,
presents data from the College Board’s Annual Survey of Col eges student borrowing from private sources has skyrocketed and now
on undergraduate charges for tuition and fees, room and board, equals about 24 percent of total education loan volume. Counting
and other estimated expenses related to attending colleges and these dollars as student aid would cause our estimates of student
universities. Although the most recent data in Trends in Student Aid aid to rise automatically as students are increasingly forced to rely
2007 are for the 2006-07 academic year, while the data in Trends on this unsubsidized funding source, concealing the growing gap
in Col ege Pricing 2007 extend to 2007-08, we publish the reports between available aid and the need for resources.
together to emphasize the relationship between how much colleges
The student aid documented in this report includes funds
and universities charge and the assistance available to students distributed to both undergraduate and graduate students, but
to pay these charges. The net prices actually paid by students and this year we have included more separate documentation of aid
families are more important for understanding college access and to undergraduates than in previous years. Tables 1a and 1b report
affordability than the higher published prices alone.
financial aid to all postsecondary students. Table 2 provides similar
Earlier this year, we issued the 2007 edition of Education Pays: information for undergraduate funding, and we report federal
The Benefits of Higher Education for Individuals and Society. loans separately for graduate and undergraduate students in Table
This publication updates the original 2004 report and provides 4. In Figure 2, we have replaced the traditional pie chart illustrating
additional information on the economic and social benefits of the sources of student aid to all postsecondary students with two
higher education. It also continues our focus on the distribution of graphs, one for undergraduates and one for graduate students. The
these benefits by examining both the progress and the persistent difference in the relative roles of grants and loans for the two groups
gaps in participation in postsecondary education.
of students is reported in Figure 6 and Table 6.
As always, we continue to improve our coverage of programs
From the students’ perspective, grant aid, which is a pure subsidy
and update previously reported statistics when better data become not requiring repayment, is most desirable and is the one form of
available. Therefore, this update replaces previous Trends in Student aid that unambiguously increases the financial accessibility of
Aid publications.
college. Education tax credits and the tax savings arising from the
federal tuition and fee deduction are also pure subsidies. The fact
Defining Student Aid
that the tax savings generally materialize months after the bills have
Students and their families pay only a fraction of the cost of been paid leads some to exclude tax benefits from the definition of
higher education; funding for the remainder comes from a variety student aid, but their value in reducing the total cost to students
of sources. At public colleges and universities, tuition levels are makes them fall clearly within our definition.
significantly lower than institutional costs because state and local Grants, Loans, Work Aid,
governments provide about $70 billion per year in funding for
college and university instruction. In recent years, the share of and Tax Benefits
total costs covered by public appropriations has declined, while the
share covered by tuition and fees has increased. Private colleges This report documents the recent stagnation in the Pell Grant
and universities charge significantly higher levels of tuition, but dollars available to individual students. It also reveals increases
tuition is still almost always lower than the cost to the institution in the total amount of Pell funding that resulted from increased
of educating students. It is subsidized primarily by revenues participation in the program between 1999 and 2004 (Tables 8a
from private philanthropic sources. Trends in Student Aid does and 8b; Figure 8, Figures 9a, 9b, 9c, and 9d, and Figures 10a, 10b,
not address these general subsidies to students. We focus only and 10c). Recently legislated increases in the maximum Pell Grant
on aid that is provided directly to students to help them meet the will be reflected in future editions of Trends in Student Aid. This
published prices and other expenses associated with enrolling in year we include additional data about the 5.2 million Pell recipients,
postsecondary education.
including information about age, income, and dependency status.
In recent years student financing has become more complex,
Pell Grants constitute 65 percent of federal grants to students
and the line between student aid and other sources of funds has and are supplemented by the new Academic Competitiveness and
become less clear-cut. Over half of the funds on which students rely SMART Grants, available for the first time to some Pell Grant
to supplement family resources are in the form of loans. Some loans, recipients in 2006-07, in addition to veterans benefits and other
particularly federal subsidized Stafford Loans and Perkins Loans, smaller programs. All together, these federal grants compose only
do provide valuable subsidies and are clearly a form of student aid. 31 percent of the total grant aid on which postsecondary students
At the other end of the spectrum, the rapidly expanding private rely. The largest portion of grant aid comes from colleges and
Trends in Higher Education Series
universities themselves, which provide 41 percent of the total, with Other exemptions from income taxation include education benefits
the remainder funded by states and private sources.
from employers; the interest on education savings bonds; returns
Our measure of student aid includes all education loans involving on savings in Coverdell Education Savings Accounts, 529 savings
any federal funding. About 41 percent of federal education loans plans, and prepaid tuition programs; work-related education
come through the federal government’s subsidized Stafford Loan expenses; and the personal exemption granted parents of students
program. Although these funds must be repaid after students over age 19. Figures 13a and 13b include information on assets in
complete their education, the government pays the interest while the state-sponsored Section 529 college savings plans and prepaid
student is in school and subsidizes the interest throughout the life tuition plans.
of the loan. The unsubsidized Stafford Loan program, comparable
in size to the subsidized Stafford program, has a much smaller Need-Based and Non-Need-Based Aid
subsidy component because interest accrues while the student is in
school. The difference between the two types of loans will be greater The student aid described in this report serves a variety of purposes.
in the future, as the interest rate on subsidized Stafford Loans In the 1970s and 1980s, most aid programs were designed to increase
declines gradually to reach 3.4 percent in 2011-12, while the rate access to college for students who would otherwise be unable to
on unsubsidized Stafford Loans remains fixed at 6.8 percent. Like afford to enroll. In recent years, student aid programs have been
subsidized Stafford Loans, these loans are guaranteed by the federal focused increasingly on affecting students’ choice of institutions
government and the interest rates are often below market levels. and on reducing the financial strain on middle-income families.
Interest rates on Parent Loans to Undergraduate Students (PLUS)
Our data on federal grant aid, almost all of which is need
are also limited by statute.
based, and on education tax benefits, which are concentrated on
There are two types of funding for federal education loans. middle- and upper-income families, provide an indicator of the
Under the William D. Ford Federal Direct Student Loan Program changing focus at the federal level. We also include information
(FDSLP), students borrow directly from the government. Under that distinguishes state need-based and non-need-based grant aid.
the Federal Family Education Loan Program (FFELP), the federal However, there is no simple way to draw a line between these two
government guarantees loans issued by private lenders. The division forms of aid. Some state grants are based only on need and some only
of loans between these two programs can be found in Tables 1a, on merit, but many are based on a combination of these criteria.
1b, and 2. The volume of federal loans reported in these tables is
The ambiguity is even greater for institutional grant aid. Some
lower than the volume for the same years reported last year. This is institutions, particularly the most selective private colleges and
because our reporting has switched from loan commitments to loan universities, award aid only on the basis of financial need, and
disbursements, which provide a more accurate representation of the attempt to meet as much of the need as possible for all accepted
amount of loans actually issued to students. Another improvement candidates. Other institutions award grants only to students who
in our reporting on federal student loans is the inclusion in Table have financial need, but use academic merit or other relevant
4 of the total number of Stafford Loan borrowers and the average characteristics to ration their limited funds. In contrast, many
amount each of these students borrowed. Because some students institutions, both public and private, award grant aid not only to
participate in both the subsidized and the unsubsidized Stafford students with insufficient resources to meet the cost of attendance,
programs, adding together the number of borrowers in the two but also to students who have the ability to pay, but whom the
programs would yield an overestimate of the number of borrowers, school is particularly interested in enrolling. Most non-need-based
while the average loan size for each program is an underestimate of aid is based at least partially on either academic qualifications or
the total amount borrowed by individual students.
athletic ability. We report on the distribution of institutional aid by
Alternative education loans from banks and other private lenders family income levels in Figures 10a, 10b, and 10c. The patterns vary
are not included in our measure of total student aid but we report on considerably across types of institutions.
them because of their increasing importance in student financing. Acknowledgments
These loans generally must be certified by the financial aid office
and in some cases are included in the financial aid packages Sandy Baum, senior policy analyst at the College Board, and
institutions award to students. However, an increasing proportion education policy analyst Patricia Steele collected the data and
of private education loans are direct-to-consumer loans, of which authored this report with assistance from research consultants
institutions may not even be aware. Among graduate students, there David Brodigan and Jennifer Ma. This publication would not have
was a decline in private borrowing this year, in response to the new been possible without the contributions and support of many
availability of PLUS Loans for these students.
people at the College Board, including: consultant Kathleen Payea;
This year we include information on the annual amounts Kathleen Little and Anne Sturtevant of the Enrollment division;
borrowed by individual students over time (Figures 4a and 4b). Tom Rudin, Sally Mitchell, Eleanor Vogelsang, and Edna DiFeo
Like the aggregate data, these data on student debt omit credit card of the Washington Office; Erin Thomas, Caitlin McClure, Joanne
financing, conventional consumer loans, and home equity loans Mullens, Joe Brown, Anne Sussman, Kathryn Diminnie, and the
and lines of credit.
staff of Marketing & Publication Services; and Sandra Riley of
Work-study funds constitute only about 1 percent of student Communications & Marketing.
aid. Some work-study jobs are off-campus. On-campus jobs involve
We are grateful to all of those who contributed to the data
subsidies to institutions in the form of matching funds for student collection and update of this publication, including state agency and
wages. This year we report on the overall employment patterns of special-aid program contacts, private lenders, and experts from the
students in Figures 11a, 11b, and 11c.
U.S. Department of Education. Special thanks to Dan Madzelan,
Although education tax credits and tax savings from the deduction Mary Miller, and Donald Conner of Office of Postsecondary
for tuition and fees are the only subsidies of this form included in Education, U.S. Department of Education, and Michael Solomon of
our total measure of student aid, students benefit from several other the Illinois Student Aid Commission for their assistance.
provisions of the tax code. In 2005, 6.7 million taxpayers claimed
about $4.2 billion in deductions for interest paid on student loans.
Trends in Student Aid 2007
Total Student Aid
Table 1a: Funds Used to Finance Postsecondary Education Expenses in Current Dol ars (in Mil ions),
1996-97 to 2006-07
Academic Year
Preliminary
10-Year*
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07
% Change
Federal Programs
Grants
Pell Grants
$5,780
$6,331
$7,233
$7,208
$7,956
$9,975
$11,642
$12,708
$13,150
$12,693
$12,881
123%
SEOG
$583
$583
$614
$619
$631
$691
$725
$760
$771
$779
$771
32%
LEAP
$32
$50
$25
$25
$40
$55
$66
$64
$65
$72
$74
132%
ACG
—
—
—
—
—
—
—
—
—
—
$340
—
SMART Grants
—
—
—
—
—
—
—
—
—
—
$310
—
Veterans
$1,279
$1,347
$1,484
$1,491
$1,644
$1,883
$2,313
$2,657
$3,012
$3,177
$3,644
185%
Military/Other Grants
$692
$729
$752
$822
$876
$994
$1,050
$1,280
$1,458
$1,491
$1,619
134%
Total Federal Grants
$8,366
$9,040
$10,108
$10,165
$11,147
$13,598
$15,796
$17,468
$18,456
$18,212
$19,639
135%
Federal Work-Study
$776
$906
$913
$917
$939
$1,032
$1,097
$1,107
$1,082
$1,050
$1,175
51%
Loans
Perkins Loans
$1,022
$1,062
$1,070
$1,101
$1,144
$1,239
$1,460
$1,639
$1,652
$1,594
$1,135
11%
Subsidized Stafford
$15,984
$16,119
$16,309
$16,190
$16,383
$17,391
$19,530
$22,039
$23,826
$24,452
$24,507
53%
FDSLP
$5,361
$5,569
$5,549
$5,367
$5,097
$5,124
$5,485
$5,673
$5,694
$5,471
$5,159
–4%
FFELP
$10,623
$10,550
$10,760
$10,823
$11,286
$12,267
$14,045
$16,366
$18,132
$18,982
$19,349
82%
Unsubsidized Stafford
$9,137
$10,174
$10,900
$12,166
$13,108
$14,681
$16,996
$19,599
$21,845
$23,625
$23,708
159%
FDSLP
$2,885
$3,301
$3,415
$3,691
$3,701
$3,937
$4,308
$4,435
$4,564
$4,643
$4,417
53%
FFELP
$6,251
$6,873
$7,485
$8,475
$9,406
$10,744
$12,688
$15,164
$17,281
$18,981
$19,291
209%
PLUS
$2,362
$2,678
$2,957
$3,285
$3,691
$4,122
$4,864
$6,233
$7,363
$8,185
$10,071
326%
Other Loans
$281
$217
$117
$113
$116
$118
$125
$125
$141
$157
$171
–39%
Total Federal Loans
$28,786
$30,249
$31,353
$32,855
$34,442
$37,551
$42,976
$49,635
$54,826
$58,012
$59,593
107%
Education Tax Benefits
—
—
$2,970
$4,130
$4,160
$4,260
$4,730
$5,210
$5,600
$5,740
$5,880
98%
Total Federal Aid
$37,928
$40,195
$45,344
$48,068
$50,688
$56,441
$64,599
$73,420
$79,964
$83,015
$86,288
128%
State Grant Programs
$3,163
$3,404
$3,669
$4,064
$4,766
$5,223
$5,792
$5,993
$6,620
$6,829
$7,730
144%
Institutional Grants
$11,450
$12,580
$13,870
$15,310
$16,240
$16,938
$17,664
$19,806
$21,652
$23,836
$26,323
130%
Private/Employer Grants
$3,320
$3,890
$4,550
$5,330
$5,850
$6,410
$7,030
$7,700
$8,180
$9,270
$10,170
206%
Total Federal, State,
$55,861
$60,069
$67,434
$72,772
$77,545
$85,012
$95,085 $106,919 $116,416 $122,950 $130,511
134%
Institutional Aid
Nonfederal Loans
$1,860
$2,310
$2,910
$3,960
$4,530
$5,570
$7,610
$10,050
$13,790
$17,000
$18,490
894%
State Sponsored
$290
$350
$440
$500
$540
$620
$640
$670
$810
$1,130
$1,390
379%
Private Sector
$1,570
$1,960
$2,470
$3,460
$3,990
$4,950
$6,970
$9,380
$12,980
$15,870
$17,100
989%
Total Funds Used to
Finance Postsecondary
$57,721
$62,379
$70,344
$76,732
$82,075
$90,582 $102,695 $116,969 $130,206 $139,950 $149,001
158%
Expenses
*Where programs have been in existence for less than 10 years, percent change is calculated from the first year of the program.
Note: Components may not sum exactly to totals due to rounding. Federal loan dollars reflect disbursements. Previous editions of Trends in Student Aid
have reported loan commitments, which are 10 to 20 percent higher.
During the 2006-07
• Each form of student aid carries a different benefit for students. Grants are pure
academic year, about $131
subsidies that do not have to be repaid. They may be based either on financial need
billion in financial aid was
or on other student characteristics.
distributed to undergraduate • The tax benefits reported here include Hope and Lifetime Learning tax credits and
the tuition tax deduction. These are subsidies that do not have to be repaid, but are
and graduate students in
not awarded at the time tuition payments must be made.
the form of grants from
• Some work-study jobs are off-campus. Funding for on-campus jobs subsidizes
all sources, work-study,
institutions to assure student employment.
federal loans, and federal
• The government pays the interest on subsidized Stafford Loans while the student is
tax credits and deductions.
in school, unlike other types of loans where interest accrues upon receipt.
In addition, these students
• For the entire decade reported, dependent students could borrow up to $2,625
borrowed more than $18
in the first year of study, $3,500 in the second year of study, and $5,500
billion in loans from state
in succeeding years, up to a total of $23,000. Limits are $4,000 to $5,000
a year higher for independent students, who can borrow up to $46,000 as
and private sources to help
undergraduates. Annual loan limits have been raised slightly beginning in 2007-08.
finance their education.
Trends in Higher Education Series
Total Student Aid—Adjusted for Inflation
Table 1b: Funds Used to Finance Postsecondary Education Expenses in Constant (2006) Dol ars (in Mil ions),
1996-97 to 2006-07
Academic Year
Preliminary 10-Year*
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07
% Change
Federal Programs
Grants
Pell Grants
$7,426
$7,991
$8,974
$8,692
$9,277
$11,428
$13,051
$13,941
$14,004
$13,022
$12,881
73%
SEOG
$749
$736
$762
$746
$736
$792
$813
$834
$821
$799
$771
3%
LEAP
$41
$63
$31
$30
$47
$63
$74
$70
$70
$74
$74
81%
ACG
—
—
—
—
—
—
—
—
—
$340
—
SMART Grants
—
—
—
—
—
—
—
—
—
—
$310
—
Veterans
$1,644
$1,700
$1,841
$1,798
$1,917
$2,157
$2,593
$2,914
$3,208
$3,260
$3,644
122%
Military/Other Grants
$889
$920
$933
$991
$1,021
$1,139
$1,177
$1,404
$1,552
$1,529
$1,619
82%
Total Federal Grants
$10,749
$11,409
$12,541
$12,258
$12,997
$15,579
$17,709
$19,163
$19,655
$18,684
$19,639
83%
Federal Work-Study
$997
$1,144
$1,133
$1,106
$1,095
$1,182
$1,230
$1,214
$1,152
$1,078
$1,175
18%
Loans
Perkins Loans
$1,313
$1,340
$1,328
$1,327
$1,334
$1,420
$1,637
$1,797
$1,759
$1,635
$1,135
–14%
Subsidized Stafford
$20,536 $20,344
$20,234
$19,523
$19,101
$19,924
$21,896
$24,177
$25,374
$25,086
$24,507
19%
FDSLP
$6,887
$7,029
$6,884
$6,472
$5,942
$5,870
$6,150
$6,224
$6,063
$5,612
$5,159
–25%
FFELP
$13,649
$13,315
$13,350
$13,051
$13,159
$14,054
$15,746
$17,954
$19,310
$19,473
$19,349
42%
Unsubsidized Stafford
$11,739
$12,842
$13,524
$14,671
$15,283
$16,819
$19,055
$21,501
$23,264
$24,237
$23,708
102%
FDSLP
$3,707
$4,167
$4,237
$4,451
$4,315
$4,510
$4,830
$4,865
$4,861
$4,764
$4,417
19%
FFELP
$8,032
$8,675
$9,287
$10,220
$10,967
$12,309
$14,225
$16,636
$18,403
$19,473
$19,291
140%
PLUS
$3,035
$3,380
$3,668
$3,962
$4,304
$4,722
$5,453
$6,837
$7,841
$8,397
$10,071
232%
Other Loans
$361
$273
$145
$137
$135
$135
$141
$138
$150
$161
$171
–53%
Total Federal Loans
$36,984
$38,179
$38,899
$39,619
$40,157
$43,020
$48,181
$54,450
$58,388
$59,515
$59,593
61%
Education Tax Benefits
—
—
$3,685
$4,980
$4,850
$4,880
$5,303
$5,715
$5,964
$5,889
$5,880
60%
Total Federal Aid
$48,729
$50,733
$56,258
$57,964
$59,099
$64,662
$72,423
$80,543
$85,159
$85,165
$86,288
77%
State Grant Programs
$4,064
$4,296
$4,552
$4,901
$5,557
$5,983
$6,493
$6,575
$7,050
$7,006
$7,730
90%
Institutional Grants
$14,711
$15,878
$17,208
$18,462
$18,935
$19,405
$19,803
$21,727
$23,059
$24,453
$26,323
79%
Private/Employer Grants
$4,266
$4,910
$5,645
$6,427
$6,821
$7,344
$7,881
$8,447
$8,711
$9,510
$10,170
138%
Total Federal, State,
$71,770
$75,817
$83,664
$87,754
$90,412
$97,394 $106,600
$117,292
$123,979 $126,134
$130,511
82%
Institutional Aid
Nonfederal Loans
$2,390
$2,916
$3,610
$4,775
$5,282
$6,381
$8,532
$11,025
$14,686
$17,440
$18,490
674%
State Sponsored
$373
$442
$546
$603
$630
$710
$718
$735
$863
$1,159
$1,390
273%
Private Sector
$2,017
$2,474
$3,064
$4,172
$4,652
$5,671
$7,814
$10,290
$13,823
$16,281
$17,100
748%
Total Funds Used to
Finance Postsecondary
$74,160
$78,733
$87,274
$92,529
$95,693 $103,776 $115,132
$128,317
$138,665 $143,575
$149,001
101%
Expenses
*Where programs have been in existence for less than 10 years, percent change is calculated from the first year of the program.
Note: Components may not sum exactly to totals due to rounding. Federal loan dollars reflect disbursements. Previous editions of Trends in Student Aid
have reported loan commitments, which are 10 to 20 percent higher.
After adjusting the
• The amounts of grant aid from the largest sources, institutions and the federal government, were
amounts of student
79 percent and 83 percent higher in constant dol ars, respectively, in 2006-07 than they were
aid reported in Table
a decade earlier. Grants from states and from employers and other private sources grew more
rapidly than institutional and federal grants, leading to an increase of 89 percent in total grant aid
1a for inflation, total
(Table 6).
aid to undergraduate • Federal loans have declined from 76 percent to 69 percent of total federal aid over the decade,
and graduate
as education tax credits and deductions have come to constitute 7 percent of federal aid to
students increased by
students. The decline in the share of federal loans resulted from declines in subsidized Stafford
82 percent between
borrowing at the beginning of the decade and again in 2005-06 and 2006-07.
1996-97 and 2006-07. • In 2006-07, the interest rate on Stafford Loans, which previously varied with market interest
rates, was fixed at 6.8 percent. The rate on subsidized Stafford Loans will decline to 3.4 percent
by 2011-12. Interest rates on PLUS Loans are now fixed at 8.5 percent (7.9 percent for PLUS
from the FDSLP). Rates on private education loans are general y higher and vary considerably
across students and across lenders.
• In 2006-07, for the first time, PLUS Loans were available not only to parents of undergraduate
students, but also to graduate students. Two bil ion of the $10.1 bil ion in PLUS Loans reported
here were awarded under this new program.
Trends in Student Aid 2007
Total Undergraduate and Graduate
Student Aid by Type
Figure 2a: Undergraduate Student Aid (in Bil ions) by
Figure 2b: Graduate Student Aid (in Bil ions) by Source,
Source, 2006-07
2006-07
Undergraduate Aid ($97.1 Billion)
Graduate Aid ($33.4 Billion)
Federal Grant Programs other
Private and Employer
Other Federal Grant
Private and Employer
than Pell ($3.6)
Grants ($2.9)
Programs ($3.1)
Grants ($7.3)
4%
Pell Grants
Federal Work-
7%
($12.9)
9%
9%
Study ($0.1)
13%
<1%
Institutional
Institutional
Federal
Grants ($20.6)
Grants
Work-Study
($5.7)
($1.0)
17%
21%
1%
State Grants
($0.2)
1%
Education
8%
Tax Credits
State Grants
and
($7.5)
40%
Deductions
5%
($0.8)
61%
Education Tax
Federal Loans
2%
Credits and
($39.1)
Federal Loans
Deductions ($5.1)
($20.5)
Note: Components may not sum to 100 percent due to rounding. See Notes and Sources for lists of programs included in other federal grants.
Sources: Tables 2, 3, 8a, and 8b.
Undergraduate student
• Institutional grant aid constitutes a discount off the published price. This aid was the
aid patterns are very
second-largest component of student aid for both undergraduate students (21 percent)
different from those of
and graduate students (17 percent) in 2006-07. Graduate students also receive funding
from teaching and research assistantships, which are considered compensation, not
graduate students, who
student aid.
rely more heavily on
• Forty percent of undergraduate aid was in the form of federal loans in 2006-07,
federal loans and receive
compared to 61 percent of aid to graduate students.
less of their aid in the
• Nonfederal loans are not included in Figures 2a and 2b because they are not part of the
form of federal grants.
student aid system. However, these loans from private and state sources constituted
about 29 percent of the loans taken by undergraduates and 12 percent of the loans
taken by graduate students in 2006-07. Loans comprise 49 percent of the total funds
used by undergraduates and 64 percent of the funds used by graduate students to
supplement their own resources in paying for education.
Also important:
In 2006-07, 12.3 mil ion (90 percent) of the 13.7 mil ion ful -time equivalent postsecondary students were undergraduates and 1.4 mil ion
(10 percent) were graduate students. (NCES, unpublished IPEDS data)
Trends in Higher Education Series
Total Undergraduate Student Aid—
Adjusted for Inflation
Table 2: Funds Used to Finance Undergraduate Postsecondary Education Expenses in Constant (2006) Dol ars
(in Mil ions), 1996-97 to 2006-07
Academic Year
Preliminary
10-Year*
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07 % Change
Federal Programs
Grants
Pell Grants
$7,426
$7,991
$8,974
$8,692
$9,277
$11,428
$13,051
$13,941
$14,004
$13,022 $12,881
73%
SEOG
$749
$736
$762
$746
$736
$792
$813
$834
$821
$799
$771
3%
LEAP
$41
$63
$31
$30
$47
$63
$74
$70
$70
$74
$74
81%
ACG
—
—
—
—
—
—
—
—
—
—
$340
—
SMART Grants
—
—
—
—
—
—
—
—
—
—
$310
—
Veterans
$529
$547
$593
$579
$653
$778
$989
$1,176
$1,297
$1,318
$1,473
178%
Military / Other Grants
$286
$296
$301
$319
$348
$411
$449
$567
$628
$618
$655
129%
Total Federal Grants
$9,032
$9,633
$10,660
$10,367
$11,060
$13,471
$15,377
$16,588
$16,819
$15,831
$16,504
83%
Federal Work-Study
$901
$1,032
$1,024
$998
$980
$1,056
$1,092
$1,072
$1,019
$953
$1,039
15%
Loans
Perkins Loans
$1,072
$1,086
$1,071
$1,071
$1,063
$1,119
$1,267
$1,362
$1,023
$1,246
$865
–19%
Subsidized Stafford
$14,490
$14,453
$14,268
$13,644
$13,278
$13,831
$15,065
$16,557
$17,314
$16,993
$16,640
15%
FDSLP
$4,986
$5,198
$5,058
$4,692
$4,254
$4,169
$4,328
$4,367
$4,287
$3,922
$3,610
–28%
FFELP
$9,504
$9,255
$9,210
$8,952
$9,024
$9,662
$10,737
$12,190
$13,027
$13,070
$13,030
37%
Unsubsidized Stafford
$7,030
$7,694
$7,931
$8,557
$8,982
$9,952
$10,994
$12,245
$13,104
$13,665
$13,486
92%
FDSLP
$2,443
$2,795
$2,799
$2,884
$2,791
$2,897
$2,987
$2,912
$2,861
$2,756
$2,562
5%
FFELP
$4,587
$4,899
$5,133
$5,672
$6,191
$7,055
$8,006
$9,333
$10,243
$10,909
$10,924
138%
PLUS
$3,035
$3,380
$3,668
$3,962
$4,304
$4,722
$5,453
$6,837
$7,841
$8,397
$8,066
166%
Other Loans
$235
$155
$64
$42
$42
$42
$44
$43
$46
$50
$53
–77%
Total Federal Loans
$25,863
$26,767
$27,002
$27,276
$27,668
$29,666
$32,823
$37,044
$39,330
$40,351
$39,111
51%
Education Tax Benefits
—
—
$3,165
$4,278
$4,166
$4,192
$4,555
$4,910
$5,123
$5,058
$5,051
60%
Total Federal Aid
$35,796
$37,432
$41,851
$42,918
$43,874
$48,386
$53,847
$59,613
$62,290
$62,193
$61,705
72%
State Grant Programs
$3,963
$4,189
$4,439
$4,778
$5,418
$5,834
$6,331
$6,410
$6,871
$6,828
$7,534
90%
Institutional Grants
$11,151
$11,829
$12,614
$13,291
$13,936
$14,573
$15,189
$17,011
$18,055
$19,147
$20,611
85%
Private/Employer Grants
$2,866
$3,299
$3,794
$4,319
$4,655
$5,091
$5,550
$6,041
$6,225
$6,796
$7,267
154%
Total Federal, State,
$53,776
$56,750
$62,697
$65,307
$67,884
$73,884
$80,916
$89,075
$93,441 $94,964
$97,118
81%
Institutional Aid
Nonfederal Loans
$1,644
$2,047
$2,603
$3,503
$3,923
$4,742
$6,355
$8,429
$11,631
$13,980
$15,680
854%
State Sponsored
$181
$241
$335
$415
$434
$489
$494
$506
$711
$955
$1,145
531%
Private Sector
$1,462
$1,806
$2,268
$3,088
$3,489
$4,253
$5,861
$7,923
$10,920
$13,025
$14,535
894%
Total Funds Used to
$55,419
$58,797
$65,300
$68,810
$71,807
$78,627
$87,271
$97,505 $105,072 $108,944 $112,798
104%
Finance Postsecondary
Expenses
*Where programs have been in existence for less than 10 years, percent change is calculated from the first year of the program.
Note: Components may not sum exactly to totals due to rounding. Where precise data are not available, the division of aid between undergraduate and
graduate students is based on the National Postsecondary Student Aid Study (NPSAS). Federal loan dollars reflect disbursements.
During the 2006-07 academic • In 2006-07 undergraduates received about three-quarters of all financial aid to
year, more than $97 billion in
postsecondary students.
financial aid was distributed • After adjusting for inflation, total aid to undergraduate students increased by 81
to undergraduates in the
percent between 1996-97 and 2006-07.
form of grants from all
• The amounts of grant aid from the largest sources of grant aid for undergraduates,
institutions and the federal government, were 85 percent and 83 percent higher in
sources, work-study, federal
constant dollars, respectively, in 2006-07 than they were a decade earlier. Grants
loans, and tax credits and
from states and from employers and other private sources grew more rapidly than
deductions. In addition, these
institutional and federal grants, leading to an increase of 92 percent in total grant aid to
students borrowed almost
undergraduate students.
$16 billion in loans from state • Federal loans have declined from 72 percent to 63 percent of total federal aid to
and private sources to help
undergraduates over the decade, as education tax credits and deductions have
come to constitute 7 percent of federal aid to undergraduates. Because of slow
finance their education.
growth in subsidized Stafford Loans, the decline in the share of federal loans
occurred despite rapid growth in unsubsidized Stafford and PLUS borrowing.
Trends in Student Aid 2007
Federal Aid Recipients
Table 3: Number of Recipients (in Thousands) and Aid per Recipient for Federal Grant, Campus-Based, and
Education Tax Benefit Programs in Constant (2006) Dol ars, 1996-97 to 2006-07
Academic Year
Preliminary 10-Year*
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07 % Change
Pell Grants
Recipients (000)
3,666
3,733
3,855
3,764
3,899
4,341
4,779
5,140
5,308
5,168
5,165
41%
Aid per Recipient (Constant $)
$2,026
$2,141
$2,328
$2,310
$2,379
$2,633
$2,731
$2,712
$2,638
$2,520
$2,494
23%
SEOG
Recipients (000)
1,191
1,116
1,163
1,170
1,174
1,295
1,355
1,390
1,409
1,419
1,291
8%
Aid per Recipient (Constant $)
$629
$660
$655
$638
$627
$611
$600
$600
$583
$563
$597
–5%
ACG
Recipients (000)
—
—
—
—
—
—
—
—
—
—
400
—
Aid per Recipient (Constant $)
—
—
—
—
—
—
—
—
—
—
$850
—
SMART Grants
Recipients (000)
—
—
—
—
—
—
—
—
—
—
80
—
Aid per Recipient (Constant $)
—
—
—
—
—
—
—
—
—
—
$3,875
—
Federal Work-Study
Recipients (000)
691
746
744
733
713
741
759
765
739
711
880
27%
Aid per Recipient (Constant $)
$1,443
$1,534
$1,524
$1,509
$1,536
$1,597
$1,621
$1,588
$1,559
$1,516
$1,335
–7%
Perkins Loans
Recipients (000)
674
679
669
655
639
661
729
756
749
728
514
–24%
Aid per Recipient (Constant $)
$1,947
$1,974
$1,986
$2,027
$2,087
$2,148
$2,246
$2,377
$2,349
$2,247
$2,208
13%
Education Tax Benefits
Recipients (000)
—
—
4,033
5,492
5,830
5,950
7,725
8,122
8,630
8,519
8,519
111%
Aid per Recipient (Constant $)
—
—
$914
$907
$832
$820
$686
$704
$691
$691
$690
–24%
* Where programs have been in existence for less than 10 years, percent change is calculated from the first year of the program.
Note: Education tax credit amounts equal the dollar value of the credits claimed on taxable returns; tax deduction amounts are estimated tax savings from
deductions claimed on taxable returns. IRS data for 2006-07 are not yet available; values are estimated based on data from earlier years.
The average Pell Grant
• Between 1996-97 and 2006-07, the number of Pell Grant recipients increased 41
increased 23 percent in
percent, from 3.7 mil ion to 5.2 mil ion.
inflation-adjusted dollars
• Awarded for the first time in 2006-07, Academic Competitiveness Grants (ACG)
between 1996-97 and
go to selected first- and second-year Pell Grant recipients who are U.S. citizens
enrol ed ful -time in degree-granting programs. Eligibility is based on curricular
2006-07. However, after
and grade point average requirements. In the first year of the program, 400,000
increasing from $2,026 in
students received awards averaging $850.
1996-97 to $2,731 in 2002-
• Also awarded for the first time in 2006-07, Science and Mathematics Access to
03, the average grant per
Retain Talent (SMART) Grants go to third- and fourth-year Pell Grant recipients
recipient had declined
who are U.S. citizens enrol ed ful -time in degree-granting programs and majoring
in physical, life, or computer science, engineering, mathematics, technology, or
9 percent in real terms
a specified foreign language. In the first year of the program, 80,000 students
to $2,494 by 2006-07.
received awards averaging $3,875.
10
Trends in Higher Education Series
Undergraduate and Graduate Borrowers
Table 4: Number of Borrowers (in Thousands) and Average Amount Borrowed Through Federal Loan Programs in
Constant (2006) Dol ars, 1996-97 to 2006-07
Undergraduate Students
Academic Year
Preliminary
10-Year
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07 % Change
All Stafford Loans
# of Borrowers (000)
3,956
4,100
4,153
4,198
4,279
4,582
5,003
5,493
5,839
6,018
6,121
55%
Average Amount
Borrowed (Constant $)
$5,440
$5,402
$5,349
$5,288
$5,201
$5,190
$5,209
$5,243
$5,209
$5,095
$4,922
–10%
Stafford Subsidized
# of Borrowers (000)
3,501
3,574
3,589
3,530
3,545
3,764
4,154
4,619
4,938
5,024
5,135
47%
Average Amount
Borrowed (Constant $)
$4,139
$4,044
$3,975
$3,865
$3,745
$3,674
$3,626
$3,585
$3,506
$3,382
$3,240
–22%
Stafford Unsubsidized
# of Borrowers (000)
1,759
1,925
1,993
2,150
2,292
2,552
2,836
3,173
3,438
3,662
3,754
113%
Average Amount
Borrowed (Constant $)
$3,996
$3,997
$3,980
$3,979
$3,919
$3,899
$3,876
$3,859
$3,811
$3,732
$3,593
–10%
PLUS
# of Borrowers (000)
376
406
436
460
483
508
563
665
730
759
722
92%
Average Amount
Borrowed (Constant $)
$8,069
$8,314
$8,405
$8,621
$8,914
$9,304
$9,689
$10,284
$10,738
$11,056
$11,179
39%
Graduate Students
Academic Year
Preliminary
10-Year
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07 % Change
All Stafford Loans
# of Borrowers (000)
685
671
690
700
712
771
881
999
1,085
1,135
1,177
72%
Average Amount
Borrowed (Constant $)
$15,697
$16,438
$16,777
$17,137
$17,022
$16,817
$16,902
$16,895
$16,792
$16,446
$17,091
9%
Stafford Subsidized
# of Borrowers (000)
644
629
643
644
656
705
803
912
989
1,030
1,069
66%
Average Amount
Borrowed (Constant $)
$9,384
$9,372
$9,283
$9,125
$8,877
$8,645
$8,508
$8,351
$8,148
$7,857
$7,358
–22%
Stafford Unsubsidized
# of Borrowers (000)
470
481
503
530
547
601
704
816
902
954
989
110%
Average Amount
Borrowed (Constant $)
$10,020
$10,712
$11,125
$11,543
$11,528
$11,423
$11,455
$11,345
$11,262
$11,087
$10,344
3%
PLUS
# of Borrowers (000)
—
—
—
—
—
—
—
—
—
—
127
—
Average Amount
—
—
—
—
—
—
—
—
—
—
$15,747
—
Borrowed (Constant $)
Note: The average Stafford Loan per borrower, reported in the top sections of the undergraduate and graduate portions of Table 4, combines all Stafford
Loans issued to individual students. Average amounts borrowed in the subsidized Stafford, unsubsidized Stafford, and PLUS sections of the table reflect
borrowing in the individual programs.
The number of undergraduate
• The number of parents of undergraduates taking PLUS Loans increased
subsidized Stafford Loan borrowers
92 percent to 722,000 over the decade, and the size of the average loan
increased by 47 percent to 5.1 million
increased by 39 percent in real terms.
between 1996-97 and 2006-07, and
• The number of graduate subsidized Stafford Loans increased by 66
percent to 1.1 mil ion between 1996-97 and 2006-07, and the number
the number of unsubsidized Stafford
of unsubsidized Stafford Loans increased by 110 percent to 989,000.
Loan borrowers increased by 113
• 127,000 graduate students borrowed an average of $15,747 in PLUS
percent to 3.8 million. The value of
Loans in 2006-07.
the average loans in both programs
• Of the 6.1 mil ion undergraduate Stafford Loan borrowers in 2006-
declined, after adjusting for inflation.
07, 2.8 mil ion (45 percent) took both subsidized and unsubsidized
loans. Three-quarters of graduate Stafford Loan borrowers took both
subsidized and unsubsidized loans.
Trends in Student Aid 2007
11
Types of Grants and Loans
Figure 3a: Growth of Federal, Institutional, and State Grant Dol ars in Constant (2006) Dol ars (in Bil ions),
1996-97 to 2006-07
$80
$70
$60
12%
12%
12%
06 Dollars)
12%
$50
13%
16%
16%
12%
15%
15%
$40
13%
15%
12%
11%
15%
15%
12%
14%
15%
39%
39%
41%
41%
$30
12%
13%
13%
38%
40%
STATE GRANTS
43%
$20
43%
44%
44%
44%
PRIVATE AND EMPLOYER
ants in Billions (20
GRANTS
Gr $10
34%
31%
31%
32%
34%
34%
31%
INSTITUTIONAL GRANTS
32%
31%
29%
29%
$0
FEDERAL GRANTS
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07
Academic Year
Figure 3b: Growth of Stafford, PLUS, and Nonfederal Loan Dol ars in Constant (2006) Dol ars (in Bil ions),
1996-97 to 2006-07
$80
$70
24%
21%
23%
$60
17%
11%
11%
13%
06 Dollars) $50
16%
11%
13%
10%
$40
6%
7%
11%
9%
12%
9%
10%
32%
8%
9%
10%
9%
33%
34%
31%
$30
35%
NONFEDERAL LOANS
31%
33%
33%
34%
35%
35%
PLUS LOANS
$20
UNSUBSIDIZED
Loans in Billions (20
33%
$10
38%
36%
32%
STAFFORD LOANS
54%
52%
49%
45%
43%
42%
40%
SUBSIDIZED
$0
STAFFORD LOANS
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07
Academic Year
Note: Components may not sum to 100 percent due to rounding.
In 1996-97, 32 percent of the $34 billion (in
• Throughout the decade, students have relied more heavily
2006 dollars) in grant aid to undergraduate
on institutional grant aid than on federal grant aid and have
and graduate students came from the federal
received more grant dol ars from employers and other private
sources than from state governments.
government. A decade later, 31 percent of
• Subsidized Stafford Loans, which are based on financial
the $64 billion in grant aid was federal.
need and on which the government pays the interest while
students are in school, declined from 54 percent of total
In 1996-97, 93 percent of the $38 billion (in
education loans in 1996-97 to 32 percent in 2006-07. The
2006 dollars) in loans to undergraduate and
volume of these loans was 75 percent higher than the volume
of unsubsidized Stafford Loans in 1996-97, but only 3 percent
graduate students came from the federal
higher in 2006-07.
government. A decade later, 76 percent of the • Nonfederal loans, which are not part of the student aid
$77 billion in education loans was federal.
system, constituted 24 percent of education loans in 2006-07.
Credit card debt and home equity loans used to finance higher
education are not included in these figures.
1
Trends in Higher Education Series
Student Borrowing
Figure 4a: Average Amount Borrowed (and Percent Borrowing) from Federal and Private Sources by Ful -Time
Dependent Undergraduates by Family Income in Constant (2006) Dol ars, 1992-93 to 2003-04
$8,000
ed
$7,000
r
o
w
$6,000
$5,880
$5,880 $6,090
$6,040 $6,140
$5,530 $5,640
$5,430
$4,840
$4,910
$4,940
$5,150 $4,980
r
o
wing) $5,000
$4,680
$4,130
$4,410
$4,000
Amount Bor
$3,000
48%
47%
48%
36%
1992-1993
e
cent Bor
48%
42%
47% 46%
31%
35%
12%
er $2,000
46%
19%
21%
ag
39%
34%
1995-1996
(P
v
er
$1,000
1999-2000
A
$0
2003-2004
Low Income
Low-Middle Income
Middle-High Income
High Income
Family Income Quartile
Figure 4b: Average Amount Borrowed (and Percent Borrowing) from Federal and Private Sources by Ful -Time
Dependent Undergraduates by Sector in Constant (2006) Dol ars, 1992-93 to 2003-04
$8,000
ed
$7,000
$6,980 $7,320
$6,750
r
o
w
$6,000
$5,820
$5,550
$4,770 $5,080 $5,390
$5,070
r
o
wing) $5,000
$4,710 $4,640
$4,000 $3,970
62% 63%
$3,400
$2,860
$3,180
74%
Amount Bor
$3,000
71%
1992-1993
e
cent Bor
47%
55%
$2,370
er $2,000
41% 45%
44%
51%
ag
64%
1995-1996
(P
26%
12%
10%
17%
v
er
$1,000
6%
1999-2000
A
$0
2003-2004
Public Four-Year
Private Four-Year
Public Two-Year
For-Profit
Sector
Notes: Income categories are based on 1991, 1994, 1998, and 2002 quartiles of families in U.S. Census Bureau data with heads of households ages 45–54.
For 2002, low income is less than $40,000, low–middle income is between $40,000 and $69,999, middle–high income is between $70,000 and $99,999, and
high income is $100,000 and higher. For details about earlier years, see Notes and Sources. Student loans from both federal and nonfederal sources are
included. In 1992-93 and 1995-96 data include loans from friends and family.
Sources: NPSAS: 1993, 1996, 2000, and 2004; calculations by authors. U.S. Census Bureau, Current Population Survey, Annual Social and Economic
Supplement, 1992, 1995, 1999, and 2003.
Between 1992-93 and 2003-
• In 2003-04, 36 percent of students from families with incomes of $100,000
04 the percentage of full-time
or more in 2002 borrowed from federal and private sources, compared to 12
dependent students taking out
percent of similar students in 1992-93. The average amount borrowed by these
students increased by almost $1,000 in 2006 dol ars.
student loans increased most • Forty-eight percent of students from families with 2002 incomes below $40,000
rapidly in the upper half of the
borrowed from federal and private sources, compared to 39 percent of similar
income distribution, but the
students in 1992-93. The average amount borrowed by these students increased
average loan amount of those
by about $1,500 in 2006 dol ars.
who borrowed increased least • Borrowing increased most for ful -time dependent students enrol ed in for-profit
for the wealthiest students.
institutions. In 1992-93, 51 percent of these students borrowed an average of
$4,710 in 2006 dol ars. In 2003-04, 74 percent borrowed an average of $6,750.
Also important:
• Nonfederal loans played the largest role for students enrol ed in private four-year col eges, for whom almost a third of their loans (not
including parent borrowing) came from nonfederal sources in 2003-04. (NPSAS: 2004; calculations by authors)
• The proportion of borrowing that came from private sources in 2003-04 declined with family income, ranging from about 17 percent of
the loans taken by ful -time students from families with incomes below $40,000 to about 32 percent of the loans taken by those from
families with incomes of $100,000 or higher. (NPSAS: 2004; calculations by authors)
Trends in Student Aid 2007
1
Distribution of Federal Aid by Sector
Table 5: Distribution of Federal Aid Funds by Sector, 1995-96 to 2005-06
Academic Year
10-Year
Pell Grants
95-96
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06 % Change
Public Two-Year
32.7 %
33.0%
32.8%
32.4%
33.4%
33.7%
35.0%
34.7%
32.8%
32.4%
33.6%
0.9
Public Four-Year
36.0 %
36.0%
36.4%
36.4%
34.8%
34.4%
33.0%
33.0%
34.0%
33.6%
31.6%
–4.3
Private Nonprofit
18.8 %
18.5%
18.6%
18.6%
18.6%
18.3%
17.9%
16.9%
16.7%
16.3%
16.1%
–2.7
For-Profit
12.5 %
12.5%
12.2%
12.5%
13.1%
13.6%
14.2%
15.4%
16.5%
17.7%
18.6%
6.1
Campus-Based Aid Programs
Public Two-Year
9.6 %
9.8%
9.9%
9.9%
9.8%
9.8%
9.8%
9.0%
8.5%
8.6%
8.7%
–0.8
Public Four-Year
40.9 %
41.1%
40.7%
40.5%
40.3%
40.1%
39.4%
40.1%
39.4%
38.6%
38.9%
–2.0
Private Nonprofit
45.6 %
45.1%
45.5%
45.5%
45.7%
45.9%
46.0%
45.7%
46.5%
46.7%
45.9%
0.4
For-Profit
4.0 %
4.1%
3.9%
4.0%
4.2%
4.2%
4.8%
5.3%
5.6%
6.1%
6.5%
2.5
Stafford Subsidized Loans
Public Two-Year
5.4 %
5.4%
5.4%
5.2%
5.1%
5.0%
5.4%
5.9%
6.3%
6.6%
6.7%
1.3
Public Four-Year
48.5 %
48.7%
48.5%
48.0%
47.0%
45.9%
45.0%
44.4%
43.9%
43.3%
42.6%
–5.9
Private Nonprofit
38.9 %
38.1%
38.4%
38.2%
38.4%
38.4%
37.6%
36.6%
35.2%
34.1%
33.7%
–5.2
For-Profit
7.2 %
7.8%
7.7%
8.6%
9.5%
10.7%
12.0%
13.1%
14.6%
16.0%
17.0%
9.8
Stafford Unsubsidized Loans
Public Two-Year
4.8 %
4.7%
4.7%
4.3%
4.1%
4.1%
4.5%
5.1%
5.6%
5.9%
6.0%
1.2
Public Four-Year
42.7 %
43.3%
43.4%
42.7%
42.9%
42.2%
41.8%
40.8%
40.1%
39.4%
39.2%
–3.5
Private Nonprofit
42.3 %
41.5%
41.9%
42.0%
41.3%
41.0%
39.7%
38.7%
36.9%
35.8%
35.1%
–7.2
For-Profit
10.2 %
10.5%
10.0%
11.0%
11.7%
12.7%
14.0%
15.4%
17.4%
18.9%
19.7%
9.5
PLUS Loans
Public Two-Year
0.9 %
0.9%
0.9%
0.9%
0.8%
0.7%
0.8%
0.8%
0.9%
1.0%
1.0%
0.1
Public Four-Year
37.7 %
37.9%
38.2%
39.2%
38.4%
37.5%
37.5%
38.7%
39.5%
39.3%
39.8%
2.1
Private Nonprofit
50.3 %
49.9%
49.1%
47.0%
46.1%
45.9%
44.7%
43.9%
43.2%
43.1%
43.6%
–6.7
For-Profit
11.1 %
11.3%
11.8%
12.9%
14.7%
15.9%
17.0%
16.6%
16.4%
16.6%
15.6%
4.5
Note: Components may not sum to 100 percent due to rounding.
Figure 5: Distribution of Federal Aid Funds by Sector, 2005-06
Pel Grants
34%
32%
16%
19%
Campus-Based Aid
9%
39%
46%
7%
Subsidized Stafford
7%
43%
34%
17%
PUBLIC TWO-YEAR
Unsubsidized Stafford
6%
39%
35%
20%
PUBLIC FOUR-YEAR
PRIVATE NONPROFIT
PLUS Loans 1%
40%
44%
16%
FOR-PROFIT
0%
20%
40%
60%
80%
100%
Percentage of Aid
In 2005-06, the 7 percent of students enrolled in
Distribution of Full-Time Equivalent (FTE)
for-profit institutions received a disproportionate
Enrollment, Fall 00
amount of aid from all federal programs, with
Sector
% of Undergraduate FTE
% of Total FTE
Public Two-Year
32%
28%
the exception of campus-based programs.
Public Four-Year
42%
43%
• The only federal student aid program from which two-year
Private Four-Year
19%
22%
public col ege students receive a significant share of the
For-Profit
7%
7%
dollars is the Pel Grant program.
Note: Full-time equivalent enrollment is based on a formula that counts
• Private nonprofit institutions, with 19 percent of
approximately three part-time students as one full-time student. Total
undergraduate enrol ments, distribute 46 percent of
FTE includes both undergraduate and graduate students.
federal campus-based aid, which includes Supplemental
Educational Opportunity Grants (SEOG) , Federal Work-
Study, and Perkins Loans.
1
Trends in Higher Education Series
Total Funding by Type
Table 6: Total Funds for Undergraduate and Graduate Students in Constant (2006) Dol ars (in Mil ions) and As a
Percentage of Total Aid, Five-Year Intervals, 1991-92 to 2006-07
All Students (Constant 00 Dollars)
All Students (Percentage)
91-92
96-97
01-02
06-07
91-92
96-97
01-02
06-07
Grants
$28,485
$33,789
$48,311
$63,863
57%
46%
47%
43%
Loans
$19,936
$39,373
$49,402
$78,083
40%
53%
48%
52%
Work-Study
$1,122
$997
$1,182
$1,175
2%
1%
1%
1%
Education Tax Benefits
—
—
$4,880
$5,880
0%
0%
5%
4%
Total
$49,543
$74,160
$103,776
$149,001
Undergraduate Students (Percentage)
Graduate Students (Percentage)
91-92
96-97
01-02
06-07
91-92
96-97
01-02
06-07
Grants
63%
49%
50%
46%
39%
36%
37%
33%
Loans
35%
50%
44%
49%
60%
63%
60%
64%
Work-Study
3%
2%
1%
1%
1%
1%
1%
0%
Education Tax Benefits
0%
0%
5%
4%
0%
0%
3%
2%
Note: Components may not sum to 100 percent due to rounding. Graduate student aid does not include teaching and research assistantships. Nonfederal
loans are included in the loan amounts reported in Table 6.
Figure 6: Grants and Loans As a Percentage of Total Aid, 1991-92 to 2006-07
Undergraduate Students
Graduate Students
90%
90%
80%
80%
70%
70%
Loans 64%
Aid
60%
Aid 60%
Loans 49%
T
otal
50%
T
otal 50%
e of
e of
40%
Grants 46%
40%
centag
centag
30%
30%
P
er
P
er
Grants 33%
20%
20%
10%
10%
0%
0%
91-92
94-95
97-98
00-01
03-04
06-07
91-92
94-95
97-98
00-01
03-04
06-07
Academic Year
Academic Year
In 2006-07, undergraduate
• The ratio of grants to loans for undergraduates declined in the early
students received 46 percent
1990s with the implementation of the unsubsidized Stafford Loan
of their funding in the form of
program. The proportion of aid in the form of grants held steady from
1995-96 through 2002-03, with the proportion in loans declining with
grants and 49 percent in the form
the implementation of the federal education tax credit in 1998. After
of loans, including alternative
declining from 49 percent in 2002-03 to 45 percent in 2005-06, the
nonfederal loans. The proportions for
grant share rose slightly to 46 percent for undergraduates in 2006-07.
graduate students were 33 percent
• Graduate students, who comprise about 13 percent of ful -time
grants and 64 percent loans.
equivalent enrol ments in postsecondary institutions, received 19
percent of all grant aid in 2006-07 and borrowed 30 percent of education
loan funds.
Trends in Student Aid 2007
1
Total Aid per Full-Time Equivalent Student
Table 7a: Total Aid, Grant Aid, Loan Aid, and Education Tax Benefits per Ful -Time Equivalent (FTE) Student in
Constant (2006) Dol ars, Five-Year Intervals, 1986-87 to 2006-07
Average
Total Grant
Average
Total Federal
Average
Total Education Education Tax
Total Aid
Average Total
Aid
Grant Aid
Loan Aid
Federal Loans Tax Benefits
Benefits
FTE
(in Millions)
Aid per FTE
(in Millions)
per FTE
(in Millions)
per FTE
(in Millions)
per FTE
1986-87
9,064,165
$35,961
$3,967
$18,253
$2,014
$16,554
$1,826
—
—
1991-92
10,360,997
$49,543
$4,782
$28,485
$2,749
$19,936
$1,924
—
—
1996-97
10,830,744
$71,770
$6,627
$33,789
$3,120
$36,984
$3,415
—
—
2001-02
11,929,331
$98,206
$8,164
$48,311
$4,050
$43,020
$3,606
$4,880
$409
2006-07
13,739,199
$130,511
$9,499
$63,863
$4,648
$59,593
$4,337
$5,880
$428
Table 7b: Total Aid, Grant Aid, Loan Aid, and Education Tax Benefits per Ful -Time Equivalent (FTE) Student in
Constant (2006) Dol ars, 1996-97 to 2006-07
Average
Total Grant
Average
Total Federal
Average
Total Education Education Tax
Total Aid
Average Total
Aid
Grant Aid
Loan Aid
Federal Loans Tax Benefits
Benefits
FTE
(in Millions)
Aid per FTE
(in Millions)
per FTE
(in Millions)
per FTE
(in Millions)
per FTE
1996-97
10,830,744
$71,770
$6,627
$33,789
$3,120
$36,984
$3,415
—
—
1997-98
10,931,168
$75,817
$6,936
$36,494
$3,339
$38,179
$3,493
—
—
1998-99
10,979,902
$83,664
$7,620
$39,947
$3,638
$38,899
$3,543
$3,685
$336
1999-00
11,210,532
$87,754
$7,828
$42,048
$3,751
$39,619
$3,534
$4,980
$444
2000-01
11,451,162
$90,412
$7,895
$44,310
$3,869
$40,157
$3,507
$4,850
$424
2001-02
11,929,331
$97,394
$8,164
$48,311
$4,050
$43,020
$3,606
$4,880
$409
2002-03
12,417,690
$106,600
$8,585
$51,886
$4,178
$48,181
$3,880
$5,303
$427
2003-04
12,715,448
$117,292
$9,224
$55,912
$4,397
$54,450
$4,282
$5,715
$449
2004-05
13,019,646
$123,979
$9,522
$58,475
$4,491
$58,388
$4,485
$5,964
$458
2005-06
13,373,055
$126,134
$9,432
$59,653
$4,461
$59,515
$4,450
$5,889
$440
2006-07
13,739,199
$130,511
$9,499
$63,863
$4,648
$59,593
$4,337
$5,880
$428
Note: The figures reported here reflect total student aid amounts divided across all students, including nonrecipients. Tax credit and deduction amounts
are College Board estimates based on IRS data. Only credits and deductions claimed on taxable returns are included. Loan numbers do not include
private nonfederal loans, which provide funding for students but do not involve subsidies. See Notes and Sources for more detail. FTE include both
undergraduates and graduate students.
Figure 7: Average Aid per Ful -Time Equivalent (FTE) Student in Constant (2006) Dol ars, 1986-87 to 2006-07
$10,000
Average Total Aid per FTE
$8,000
($9,499 in 2006-07)
Aid
06) Dollars
Average Grant Aid per FTE
e
$6,000
($4,648 in 2006-07)
ag
v
er
$4,000
A
Average Federal Loan per FTE
$2,000
($4,337 in 2006-07)
in Constant (20
$0
1986-87
1988-89
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01
2002-03
2004-05
2006-07
Academic Year
Between 1996-97 and 2006-07,
• In 2006-07, postsecondary students received an average of $4,648 in grants,
total student aid increased 82 per-
$4,337 in federal loans, and $428 in tax benefits per student.
cent and total grant aid increased • Grant aid per student increased at an average rate of about 4.5 percent a year in
89 percent in real terms. The
inflation-adjusted dol ars from 1986-87 to 1996-97, and 4.1 percent a year from
1996-97 to 2006-07.
number of FTE students increased • Federal loan aid per student increased at an average rate of 2.4 percent a year in
by 27 percent over the decade, so
inflation-adjusted dol ars over the decade from 1996-97 to 2006-07, significantly
total aid per student increased
more slowly than the 6.5 percent annual rate over the 10 years beginning in
by only 43 percent in constant
1986-87. Average federal loan aid declined between 2005-06 and 2006-07.
dollars, while grant aid per stu-
• For undergraduates alone, average student aid in 2006-07 was $7,891, including
dent increased by 49 percent.
$4,218 in grants, $3,178 in loans, and $410 in tax benefits per student. (These
figures are not shown in Table 7.) These amounts were lower than the average
amounts of aid received by graduate students.
1
Trends in Higher Education Series
State Grants to Undergraduate Students
Figure 8: Total Need-Based and Non-Need-Based State Grants in Constant (2006) Dol ars (in Bil ions),
1969-70 to 2005-06
$8.0
$7.0
$6.0
06 dollars)
$5.0
$4.0
$3.0
ants (in billions of constant 20 $2.0
e Gr
Stat $1.0
$0
69-70
72-73
75-76
78-79
81-82
84-85
87-88
90-91
93-94
96-97
99-00
02-03
05-06
Academic Year
NON-NEED-BASED GRANTS NEED-BASED GRANTS
Note: Students must meet some standard of financial need to be eligible for need-based grants. Non-need-based grants do not have this requirement.
These data are based on undergraduate state grants, excluding Puerto Rico.
Source: National Association of State Student Grant and Aid Programs (NASSGAP) Survey.
Over the decade from
• In 1985-86, 9 percent of state grant aid to undergraduate students was based on
1995-96 to 2005-06,
criteria other than financial need. By 1995-96, that proportion had risen to 14 percent
state grant aid to
and in 2005-06, it was 28 percent. Some need-based state grants require minimum
academic qualifications.
undergraduates increased • In 2005-06, states awarded an average of $575 in total grant aid per ful -time equivalent
by 85 percent in inflation-
undergraduate. South Carolina awarded $1,700 per student. Georgia, Kentucky, and
adjusted dollars. Need-
New York also gave more than $1,000 per student. Arizona, Hawai , and Wyoming
based grants rose by
awarded less than $10 per student.
56 percent ($1.8 billion
• In 2005-06, the states awarded an average of $415 in need-based grant aid per FTE
in 2006 dollars) while
undergraduate. New York awarded $1,100 per student. New Jersey and Pennsylvania
gave more than $800 per student. South Dakota did not give need-based state grants.
non-need-based state
Arizona, Georgia, Hawai , Louisiana, and Wyoming awarded less than $10 per student
grants increased by
in need-based grant aid.
more than 250 percent
• States that award only need-based grant aid increased their need-based grants by
($1.4 billion in 2006
169 percent between 1995-96 and 2005-06. States that award both need-based and
dollars) over the decade.
non-need-based grant aid increased their need-based aid more slowly. In those states
where less than half of the grant aid is need based, need-based grant dol ars more
than doubled over the decade; in those states where more than half of the aid is need
based, need-based grant dol ars increased by only 90 percent. (NASSGAP; calculations
by the authors)
• Between 1994-95 and 2005-06, the proportion of state grant aid to undergraduates
that was based on need increased in 12 states and decreased in 23 states.
Trends in Student Aid 2007
1
Pell Grants
Table 8a: Federal Pell Grant Awards in Current and Constant (2006) Dol ars, Five-Year Intervals,
1976-77 to 2006-07
Maximum
Number of
Percent of
Expenditures (in Millions)
Actual Maximum Awards
Actual Minimum Awards
Percent of
Recipients
Recipients
Current
Constant
Current
Constant
Current
Constant
Costs
(in Thousands) Independent
1976-77
$1,475
$5,132
$1,400
$4,870
$200
$696
50%
1,944
38.3%
1981-82
$2,300
$4,989
$1,670
$3,623
$120
$260
50%
2,709
41.9%
1986-87
$3,460
$6,349
$2,100
$3,854
$100
$184
60%
2,660
53.9%
1991-92
$5,793
$8,557
$2,400
$3,545
$200
$295
60%
3,786
61.5%
1996-97
$5,780
$7,426
$2,470
$3,173
$400
$514
—
3,666
57.6%
2001-02
$9,975
$11,428
$3,750
$4,296
$400
$458
—
4,341
57.1%
2006-07
$12,881
$12,881
$4,050
$4,050
$400
$400
—
5,165
58.9%
Table 8b: Federal Pell Grant Awards in Current and Constant (2006) Dol ars, 1996-97 to 2006-07
Maximum
Number of
Percent of
Expenditures (in Millions)
Actual Maximum Awards
Actual Minimum Awards
Percent of
Recipients
Recipients
Current
Constant
Current
Constant
Current
Constant
Costs
(in Thousands) Independent
1996-97
$5,780
$7,426
$2,470
$3,173
$400
$514
—
3,666
57.6%
1997-98
$6,331
$7,991
$2,700
$3,408
$400
$505
—
3,733
56.6%
1998-99
$7,233
$8,974
$3,000
$3,722
$400
$496
—
3,855
55.3%
1999-00
$7,208
$8,692
$3,125
$3,768
$400
$482
—
3,764
55.5%
2000-01
$7,956
$9,277
$3,300
$3,848
$400
$466
—
3,899
56.2%
2001-02
$9,975
$11,428
$3,750
$4,296
$400
$458
—
4,341
57.1%
2002-03
$11,642
$13,051
$4,000
$4,484
$400
$448
—
4,779
57.5%
2003-04
$12,708
$13,941
$4,050
$4,443
$400
$439
—
5,140
57.8%
2004-05
$13,150
$14,004
$4,050
$4,313
$400
$426
—
5,308
58.3%
2005-06
$12,693
$13,022
$4,050
$4,155
$400
$410
—
5,168
59.0%
2006-07
$12,881
$12,881
$4,050
$4,050
$400
$400
—
5,165
58.9%
Note: Until 1980, individual Pell Grants were capped at 50 percent of the student’s cost of attendance. The cap was raised to 60 percent of the cost of
attendance in 1980 and removed entirely in 1993.
The maximum Pell Grant was $4,050 from
• In 1986-87, the maximum Pell Grant covered 52 percent of
2003-04 through 2006-07. However, it
average tuition and fees and room and board at public four-year
has been increased to $4,310 for 2007-08.
col eges and universities, and 21 percent at the average private
four-year institution. These figures had declined to 35 percent
The maximum Pell Grant covers about 32
and 13 percent, respectively, by 1996-97.
percent of average total tuition and fees
• By 1996-97, the maximum Pell Grant had declined to 80
and room and board at public four-year
percent of its 1986-87 value. It peaked at 116 percent of the
colleges and universities, and 13 percent at
1986-87 value in 2002-03. In 2006-07, the maximum Pell Grant
the average private four-year institution.
was 5 percent higher in inflation-adjusted dol ars than it had
been 20 years earlier.
Figure 9a: Maximum Pell Grant As a Percentage of Tuition and Fees and Room and Board, 1986-87 to 2006-07
60%
50%
TFRB 40%
Public Four-Year
e of 30%
centag 20%
P
er 10%
Private Four-Year
0%
1986-87
1988-89
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01
2002-03
2004-05
2006-07
Academic Year
1
Trends in Higher Education Series
Pell Grants
Figure 9b: Total Pell Expenditures (in Mil ions), Maximum Pell
Figure 9c: Distribution of Pell Grant Recipients
Grant, and Average Pell Grant in Constant (2006) Dol ars, and
by Age, 2005-06
Number of Recipients (in Thousands), 1976-77 to 2006-07
$16,000
Age 51 and Older
Total Expenditures (in Millions)
Age 41– 50
1%
$14,000
8,000
6%
$12,000
7,000 Number of Recipients
Age 20 and
Age 31–40
Younger
6,000
$10,000
14%
32%
06) Dollars
5,000
$8,000
4,000
$6,000
Number Of Pell Recipients
3,000
15%
(in Thousands)
Age 26–30
Constant (20 $4,000
2,000
Maximum Pell Grant
$2,000
1,000
Average Pell Grant Per Recipient
32%
40%
$0
76-77 80-81 84-85 88-89 92-93 96-97 00-01 04-05
Age 21–25
Academic Year
Figure 9d: Distribution of Pell Grant Recipients by Family Income and Dependency Status, 2005-06
60%
59%
50%
40%
41%
40%
ell Recipients 30%
27%
e of P 20%
19%
10%
9%
centag
4%
P
er
0%
$20,000
$20,001–
$30,001–
$40,001–
$50,001
Dependent
Independent
or less
$30,000
$40,000
$50,000
or more
Undergraduates Undergraduates
2004 Family Income of Dependent Students
Dependency
Note: Components may not sum to 100 percent due to rounding.
Source: Figure 9b is based on Table 8a. Figure 9c and 9d data are from the Federal Pell Grant Program End-of-Year Report, 2005-06.
Among dependent
• The number of Pell Grant recipients grew 19 percent from 1996-97 to 2001-02, and
Pell Grant recipients
by another 18 percent from 2001-02 to 2006-07. Total Pell expenditures grew by 54
in 2005-06, two-thirds
percent in inflation-adjusted dol ars over the first five-year period, but by only 13 percent
over the second five years.
came from families with • The 2006-07 average Pell Grant of $2,494 was at its lowest level, after adjusting for
incomes below $30,000.
inflation, since 2000-01.
• In 1986-87 the value of the average Pel Grant was $2,387 in 2006 dollars. It had declined
to $2,026 by 1996-97, but increased to $2,731 by 2002-03. The average Pel Grant
declined in real terms in each of the four fol owing years, reaching $2,494 in 2006-07.
• In 2005-06, 37 percent of Pell Grant recipients were age 26 or older.
• Fifty-nine percent of 2005-06 Pell Grant recipients were independent and qualified
for student aid based on their own financial circumstances, while 41 percent were
dependent on their parents. Independent students received 57 percent of the Pell Grant
funds (Federal Pell Grant Program End-of-Year Report, 2005-06, Table 19).
Trends in Student Aid 2007
1
Institutional Grants: Private Institutions
Figure 10a: Average Institutional, and Federal and State Grants per Ful -Time Dependent Student at Private
Four-Year Colleges and Universities by Family Income Quartile, Grouped by Admissions Selectivity, in Constant
(2006) Dol ars, 2003-04
$40,000
Very Selective
$35,499
Moderately Selective
Minimally Selective
$35,000
$33,340
$34,136
and Open Admissions
$30,922
$30,306
$26,869
t
endance $30,000
$24,448
At
$19,738
$26,633
$25,133
$25,000
TF
$24,103
$24,701
$25,439
$21,579
$19,016
$22,477
$23,558
$14,614
$17,059
$22,020
$20,571
$19,229
$20,000
$17,790
TF
$13,989
TF
$15,000
$10,000
$1,067
$3,333
$422
$1,775
$543
$190
$4,161
$223
$1,109
ants and Net Cost of
$5,000
$3,930
$538
$132
$7,234
$7,825
$6,845
$5,328
$5,867
$5,880
Gr
$4,387
$4,831
$3,578
$3,792
$0
$2,652
$2,981
Low
Middle–High
Low
Middle–High
Low
Middle–High
Income
Income
Income
Income
Income
Income
Low–Middle
High
Low–Middle
High
Low–Middle
High
Income
Income
Income
Income
Income
Income
Family Income Quartile
Family Income Quartile
Family Income Quartile
TUITION AND FEES (TF) NET COST OF ATTENDANCE FEDERAL AND STATE GRANTS INSTITUTIONAL GRANTS
Notes: Selectivity is defined according to an index developed by NCES based on average SAT/ACT scores and percentage of applicants accepted.
Income categories are based on 2002 quartiles of families in U.S. Census Bureau data with heads of households ages 45–54. Low income is less than
$40,000, low–middle income is between $40,000 and $69,999, middle–high income is between $70,000 and $99,999, and high income is $100,000 and
higher.
Sources: NPSAS: 2004; U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 2003; calculations by authors.
Net cost of attendance is the total student budget, including tuition and fees, room and board, and other living expenses less all grant aid. The dotted line on
each bar corresponds to the average published tuition and fees for students in the specified income bracket in the type of institution described.
Institutional grants cover • Within each level of institutional selectivity, affluent students attend col eges with higher
over one-third of tuition
published levels of tuition and fees than those attended by lower-income students.
and fees for students from
However, institutional grant aid al ows lower-income students to pay a significantly lower
net price than wealthier students pay.
families in the lower half • The distribution of institutional aid favors low-income students most at very selective
of the income distribution
institutions, where in 2003-04 only about 22 percent of dependent students were from
at very selective and
families with incomes below $40,000 and 37 percent were from families with incomes
moderately selective
of $100,000 or higher.
private institutions.
• At the least-selective private four-year col eges, where in 2003-04, 42 percent of the
dependent students were from families with incomes below $40,000 and only 17
percent were from families with incomes of $100,000 or higher, lower-income students
received less institutional grant aid, on average, than did wealthier students. However,
because of federal and state grant aid, net prices paid increased with income.
Income Distribution of Families Within Private Colleges and Universities by Admissions Selectivity, 2003-04
High Income
50%
Middle-High Income
42%
40%
37%
Low-Middle Income
e of udents 30%
27% 27%
Low Income
22%
23% 23%
24%
20%
20% 22%
centag
17% 17%
LOW INCOME
P
er olled St
LOW–MIDDLE INCOME
10%
Enr
MIDDLE–HIGH INCOME
0%
HIGH INCOME
Very Selective
Moderately Selective Minimal y Selective
Admissions Selectivity
Note: Components may not sum to 100 percent due to rounding.
0
Trends in Higher Education Series
Institutional Grants: Public Institutions
Figure 10b: Average Institutional, and Federal and
Figure 10c: Average Institutional, and Federal and
State Grants per Ful -Time Dependent Student at
State Grants per Ful -Time Dependent Student at
Public Four-Year Colleges and Universities by Family
Public Two-Year Colleges by Family Income Quartile in
Income Quartile in Constant (2006) Dol ars, 2003-04
Constant (2006) Dol ars, 2003-04
$16,000
$16,000
$14,676
$15,226
$14,000 $13,671
$13,966
$14,321
$13,498
$14,000
$9,366
$12,488
t
endance $12,000
t
endance $12,000
At
At
$10,000
$10,000 $8,291 $8,673 $8,567 $8,601
$8,000
$8,000 $6,256
$8,055
$8,268
$8,389
$6,000
TF
$6,000
$4,000
$4,000
$114
$3,197
ants and Net Cost of
$2,000
$690
$322
ants and Net Cost of
$2,000
$228
TF
$313
Gr
$1,108
$1,778
$60
$0
$788
$856
$677
Gr
$0
$257
$305
$185
$152
Low
Middle–High
Low
Middle–High
Income
Income
Income
Income
Low–Middle
High
Low–Middle
High
Income
Income
Income
Income
Family Income Quartile
Family Income Quartile
TUITION AND FEES (TF) NET COST OF ATTENDANCE FEDERAL AND STATE GRANTS INSTITUTIONAL GRANTS
Note: Income categories are based on 2002 quartiles of families in U.S. Census Bureau data with heads of households ages 45–54. Low income is less than
$40,000, low-middle income is between $40,000 and $69,999, middle-high income is between $70,000 and $99,999, and high income is $100,000 and higher.
Sources: NPSAS: 2004; U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 2003; calculations by authors.
Net cost of attendance is the total student budget, including tuition and fees, room and board, and other living expenses less all grant aid. The dotted line on
each bar corresponds to the average published tuition and fees for students in the specified income bracket in the type of institution described.
Institutional grants cover about a
• For students at all income levels, institutional grant aid constitutes a
quarter of tuition and fees for low-
much lower proportion of total grant aid at public two-year and four-year
income students at public four-year
col eges than is the case at private institutions.
colleges and universities. Total
• In 2003-04, students from families with 2002 incomes below $40,000
enrol ed in public four-year col eges received significantly larger
grants cover almost 90 percent
institutional grants than students from wealthier families. In public
of tuition and fees and about
two-year col eges, where both tuition and fees and grant aid are lower,
30 percent of the total budget,
students from families with incomes between $40,000 and $70,000 also
including room and board and other
received much more generous grant aid than those with higher incomes.
living costs for these students.
Income Distribution of Families Within Public Colleges and Universities, 2003-04
High Income
50%
Middle-High Income
40%
37%
Low-Middle Income
e of
31%
udents 30%
27% 28%
Low Income
21% 23%
20%
centag
LOW INCOME
17%
16%
P
er olled St
LOW–MIDDLE INCOME
10%
Enr
MIDDLE–HIGH INCOME
0%
HIGH INCOME
Public Four-Year
Public Two-Year
Sector
Note: Components may not sum to 100 percent due to rounding.
Trends in Student Aid 2007
1
Student Employment
Figure 11a: Percentage of Ful -Time Students Under Age
Figure 11b: Hours of Employment per Week for
25 Employed and Hours of Employment per Week by
Ful -Time and Part-Time Students Under Age 25, 2005
Gender, Race/Ethnicity, and Sector, 2005
90%
90%
84%
87%
80%
80%
y
ed 70%
y
ed 70%
60%
60%
45%
52%
53%
53%
50%
50%
49%
46%
9%
50%
48%
69%
e Emplo
9%
40%
39%
13%
8%
41%
15%
40%
e Emplo
10%
38%
40%
9%
9%
7%
30%
9%
7%
22%
22%
23%
30%
24%
21%
21%
centag
20%
14%
29%
20%
20%
19%
centag
20%
20%
P
er 10%
21%
P
er
19%
18% 20%
10%
16%
13%
16%
18%
17%
13%
11%
0%
9%
0%
11%
6%
Male
White Hispanic
Public
Private
FT Undergraduates
PT Undergraduates
Female
Black
Asian
Two-Year Four-Year
FT Graduates
PT Graduates
Public Four-Year
Attendance Intensity
35 HOURS OR MORE 20–34 HOURS LESS THAN 20 HOURS
Figure 11c: Percentage of Ful -Time and Part-Time Students Under Age 25 Who Were Employed, 1970–2005
100%
Part-Time Students
y
ed 80%
60%
e Emplo
Ful -Time Students
40%
centag 20%
P
er
0%
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
Year
Note: Employment totals exclude those who were employed but did not work during the survey week. Employment data do not distinguish between
work-study and other employment. Components may not sum to 100 percent due to rounding.
Source: NCES, Condition of Education, 2007, Tables 45-1 and 45-2, based on Current Population Survey, October Supplement, 1970–2005
In 2005, almost
• In 2005, the 84 percent of part-time undergraduates who were employed was similar to the
half of all full-time
87 percent of part-time graduate students under age 25 who were employed. Forty-eight
undergraduate
percent of ful -time undergraduates were employed, compared to 53 percent of ful -time
graduate students.
students under age
• Sixty-nine percent of part-time graduate students under age 25, 45 percent of part-time
25 were employed.
undergraduates, 15 percent of ful -time graduate students, and 9 percent of ful -time
Eighteen percent
undergraduates worked 35 or more hours per week.
worked 20 hours
• The proportion of part-time students under age 25 who were employed fluctuated between
per week or less, 21
79 percent and 88 percent between 1970 and 2005.
percent worked 20
• The proportion of ful -time students under age 25 who were employed increased from about
to 34 hours, and 9
one-third in 1970 to one-half in 2005. This change occurred from the 1970s through the
percent worked 35 or
mid-1980s. Since 1988, this percentage has fluctuated between 47 percent and 52 percent.
more hours per week. • Fifty percent of ful -time female undergraduate students under age 25 worked in 2005,
compared to 46 percent of males. A slightly higher percentage of males than females
worked ful -time.
• Just over half of all white ful -time students under age 25 worked, compared to about 40
percent of Asian, black, and Hispanic students. Among those who were employed, white
students were more likely to work less than 20 hours per week.
• Forty-one percent of ful -time private four-year col ege students under age 25 were
employed in 2005, compared to 49 percent of those enrol ed in public four-year institutions
and 53 percent of similar students at public two-year col eges.
Trends in Higher Education Series
Changes in Tuition and Fees, Income,
and Aid
Figure 12: Inflation-Adjusted Changes in Tuition and Fees, Family Income, and Student Aid, 1986-87 to
1996-97 and 1996-97 to 2006-07
100%
e
87%
80%
67%
60%
55%
cent Chang
52%
er
47%
49%
43%
ed P
40%
37%
34%
27%
djust
20%
3%
ation-A
0%
Infl
-1%
-20%
Private Four-Year
Public Four-Year
Median Family
Total Aid per
Grant Aid per
Federal Loan per
Tuition and Fees
Tuition and Fees
Income (Ages 45–54) Full-Time Equivalent
FTE Student
FTE Student
(FTE) Student
1986-87 TO 1996-97 1996-97 TO 2006-07
Note: Loan aid includes federal loans only, not private nonfederal loans.
Grant aid per student rose 49 percent in
• Stagnation in family incomes during a period of rapid escalation
inflation-adjusted dollars over the decade
in col ege prices has increased reliance on grants and loans to
from 1996-97 to 2006-07, compared to 27
finance higher education.
percent for federal loans per FTE student.
• The average increases in grant dol ars between 1996-97 and
2006-07 covered an average of about a third of the increase
Public four-year tuition and fees rose 52
in private col ege tuition and fees, and half of the increase in
percent and private four-year tuition and
average public four-year col ege tuition and fees.
fees rose 34 percent over the decade. The
• The average increases in total aid, including both grant aid from
gap between average tuition and fees
all sources and federal loans, covered about two-thirds of the
and average grant aid, as well as the gap
increase in tuition and fees at private four-year institutions and
almost all of the increase in tuition and fees (but none of the
between average tuition and fees and
additional increase in costs of attendance) at public four-year
average total aid, increased in both sectors.
institutions.
Tuition and Fees, Family Income, and Aid, 1986-87, 1996-97, and 2006-07 in Constant (2006) Dol ars
Private Four-Year
Public Four-Year
Median Family
Total Aid per
Grant Aid per
Federal Loan per
Tuition and Fees
Tuition and Fees
Income (Ages 45–54)
FTE Student
FTE Student
FTE Student
1986-87
$12,218
$2,595
$71,482
$3,967
$2,014
$1,826
1996-97
$16,695
$3,822
$73,446
$6,627
$3,120
$3,415
2006-07
$22,308
$5,804
$72,881
$9,499
$4,648
$4,337
Also important:
In addition to the stagnation in median family income shown in Figure 12, increases in inequality in the distribution of income over these
two decades affected col ege affordability. The share of total income accruing to the 40 percent of families with the lowest incomes de-
clined from 15.8 percent in 1985 to 14.5 percent in 1995, and to 13.6 percent in 2004. The share of total income accruing to the 5 percent
of families with the highest incomes increased from 16.1 percent in 1985, to 20 percent in 1995, and to 20.9 percent in 2004. (Statistical
Abstract of the United States, 2007, Table 678)
Trends in Student Aid 2007
College Savings Plans
Figure 13a: Total Assets in State-Sponsored Section 529 Savings Plans in Current Dol ars (in Bil ions), 1996 to 2007
$140
$122.0
$120
$105.7
14%
$100
15%
$80
$82.5
$64.7
17%
$60
19%
$45.8
86%
$40
85%
Assets (in Billions)
24 %
66%
43%
81%
$26.8
83%
$20
$15.1
31%
81%
76%
$0
$2.4
$3.9
$3.3
$5.8
$9.3
57%
69%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
19%
34%
Year
PREPAID TUITION COLLEGE SAVINGS
Figure 13b: Number of State-Sponsored Section 529 Accounts in Mil ions (with Average Savings in Current
Dol ars), 1996 to 2007
12
10
10.0
9.3
vings) 8
8.2
ccounts
7.2
A
e Sa 6
6.0
ag
($12,257)
4.4
in Millions ver 4
A
($10,072)
($11,402)
($8,975)
($4,959)
2.6
($7,603)
Number of
2
($6,130)
(and
1.6
0.7
1.1
0.9
($5,792)
0.5
0
($4,422)
($4,577)
($5,134)
($5,917)
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Year
Note: Information on type of account is not available for years before 1999, although the majority of accounts were prepaid tuition plans. 2007 data are as
of June 30, 2007. Data for earlier years are as of December 31.
Source: College Savings Plans Network (collegesavings.org), National Association of State Treasurers.
In 2007, 10 million state-
• Assets in Section 529 col ege savings plans accumulate tax free and if used for
sponsored college savings
postsecondary education expenses, can be redeemed tax free. Standard 529 savings
accounts held an average
plans are simply tax-preferred investments in mutual funds and other financial assets.
Prepaid tuition plans are guaranteed to cover fixed proportions of tuition prices in the
of $12,257. The proportion
future, regardless of price increases.
of these tax-preferred
• In 2006, Congress modified the treatment of prepaid tuition plans in the federal
savings funds in the form
student aid system. Because 529 plans are no longer treated as student assets, they
of prepaid tuition plans
have less impact on eligibility for student aid than was previously the case.
declined from 81 percent in • Congress made the tax-free treatment of withdrawals from Section 529 col ege
1999 to 24 percent in 2003,
savings accounts permanent in 2006.
and to 14 percent in 2007.
Also important:
• More than 260 private col eges and universities have joined together in a prepaid tuition plan that carries the same tax benefits as the
state-sponsored 529 plans. The assets in this plan, not included in Figures 13a and 13b, exceed $100 mil ion. The average size of these
accounts exceeds $20,000. (www.independent529plan.org)
• Taxpayers saved an estimated $690 mil ion in federal income taxes by saving in 529 plans in 2006. (U.S. Budget 2008, Analytical
Perspectives)
• Other forms of savings for education that are granted special tax status by the federal government include Series EE and Series I
Savings Bonds and Coverdell Education Savings Accounts.
Trends in Higher Education Series
Federal Education Tax Credits and Tuition
Deductions
Figure 14a: Federal Education Tax Credits:
Figure 14b: Federal Tuition and Fee Deduction:
Distribution of Savings by Adjusted Gross Income
Distribution of Savings by Adjusted Gross Income
(AGI) Level, 2005
(AGI) Level, 2005
$100,000–$107,000 ($279) <1%
AGI Less than $25,000 ($209)
AGI Less than $25,000 ($527)
5%
10%
$25,000–$49,999 ($265)
$75,000–$99,999
12%
($1,140)
27%
$100,000–
47%
$50,000–$74,999
$160,000
16%
32%
($292)
($434)
31%
$25,000–$49,999
($840)
19%
$50,000–$74,999
($1,031)
$75,000–$99,999 ($368)
Notes: Only tax credits and deductions claimed on taxable income tax returns are included. Value of tax deductions is estimated based on applicable
marginal tax rates. Available data do not allow separation of independent students from parents of dependent students claiming tax credits and
deductions. Components may not sum to 100 percent due to rounding.
Sources: http://www.irs.gov/pub/irs-soi/05in33ar.xls; http://www.irs.gov/pub/irs-soi/05in14ar.xls; http://www.irs.gov/pub/irs-soi/05in35tr.xls;
calculations by authors.
In 2005, about 42 percent of • In 2005, parents and students were granted about $4.5 bil ion in Hope and Lifetime
the benefit of the federal
Learning tax credits. The federal tuition and fee tax deduction reduced tax liabilities
education tax credits went
by about $1.2 bil ion.
to taxpayers with incomes
• Tax credits and deductions are less likely than other forms of student aid to benefit
the lowest income students because they are available only to students and
below $50,000. Only 17
families who have positive federal tax liabilities. In addition, they cover only tuition
percent of the benefit of the
and fee expenses net of grant aid, not room and board or other education-related
tuition tax deduction went
expenses. These policies also provide larger subsidies to students paying higher
to taxpayers with incomes
tuition and fees than to those enrol ed in the lowest price institutions.
below $50,000; 47 percent
• The Hope and Lifetime Learning tax credits were available to single taxpayers with
adjusted gross income (AGI) up to $53,000 in 2005 and $55,000 in 2006, and to
went to those with incomes
married taxpayers with incomes up to $107,000 in 2005 and $110,000 in 2006. The
of $100,000 or more.
maximum credit under Hope increased from $1,500 to $1,650 in 2006, and is $2,000
under Lifetime Learning.
• The tuition tax deduction cannot be claimed for the same student for whom
an education tax credit is claimed. Married taxpayers with incomes of up to
$130,000 can deduct $4,000 in tuition and fees payments and those with incomes
between $130,000 and $160,000 can deduct $2,000. For single taxpayers,
the corresponding income limits are $65,000 and $80,000. The benefit of the
deduction depends on the applicable marginal tax rate and is larger for those with
higher incomes.
Also important:
• The federal government also al ows a tax deduction for interest paid on student loans. In 2005, 6.7 mil ion taxpayers with taxable
returns deducted about $4.2 bil ion in student loan interest, generating between $600 mil ion and $800 mil ion in savings. (U.S. Budget
2008, Analytical Perspectives; IRS, Individual Income Tax Returns, Table 1.4, 2005; calculations by authors)
• Other significant subsidies to students through the tax code include the personal exemption al owed for students age 19 and over,
which saved parents about $3.8 bil ion in 2005, and the excludability of tuition assistance from employers, which saved students about
$600 mil ion. (U.S. Budget 2008, Analytical Perspectives)
Trends in Student Aid 2007
Notes and Sources
TABLE 1a
State Grant Programs
TABLE
Federally Supported Programs
The state grant amount for 2006-07 is based
Based on data from Table 1b. The grants
category includes Pell Grants, SEOG, LEAP,
Several of the federally supported programs
on projections by the 20 states that award
Academic Competitiveness Grants (ACG),
include small amounts of funding from sources
approximately 90 percent of state grant funds
National Science and Mathematics Access
other than the federal government. For example,
and estimates made by the College Board for the
to Retain Talent (SMART) Grants, Veterans
Federal Work-Study (FWS) includes contribu-
remaining 30 states and the District of Columbia.
Benefits, Military Expenditures, Other Grants,
tions by institutions, although most of the funds
Previous data are updated using the National
State Grant Programs, Institutional Grants, and
in the program are federal. Perkins Loans (until
Association of State Student Grant and Aid
Private and Employer Grants. Loans include
1987 called National Direct Student Loans or
Programs (NASSGAP) Annual Survey.
loans from all sources, including private loans,
NDSL) are funded from federal and institu-
Institutional Grants
which are reported in Tables 1a and 1b and
tional capital contributions as well as collections
Estimates of institutional grant amounts are
Table 2, but not included in the calculation of
from borrowers. Institutional matching funds
based on Integrated Postsecondary Education
the total amount of student aid or in Figures
required by the Supplemental Educational
Data System (IPEDS) data through FY 2006
2a and 2b. The work component is FWS. Tax
Opportunity Grant (SEOG) program since
and data from the College Board’s Annual
benefits include Hope and Lifetime Learning
1989-90 are reported under institutional grants.
Survey of Col eges. These figures represent best
federal tax credits and estimated tax savings
LEAP. Formerly known as the State
approximations and are updated each year as
from the federal tuition and fees deduction. Pell,
Student Incentive Grant (SSIG) program,
additional information becomes available.
SEOG, ACG, and SMART Grants are exclusively
the Leveraging Educational Assistance
for undergraduate students. Breakdown of
Partnerships (LEAP) monies reported under
Private and Employer Grants
other grants by level of study is based on NPSAS
federally supported aid include federal monies
Private and employer grant amounts are based
data. Breakdown of federal loans is based on
only; the state share is included in the state
on data included in the 1992-93 through
information provided by the U.S. Department of
grants category.
2003-04 National Postsecondary Student Aid
Education. Breakdown of private loans is based
Veterans. Benefits are payments for
Study (NPSAS) and a 2006 survey of major
on reporting by the lenders and NPSAS.
postsecondary education and training to
private student grant providers with the
TABLES a and b
veterans and their dependents authorized
assistance of the National Scholarship Provider’s
under Chapters 30, 31, 32, 34, 35, and 106 of
Association; information from annual reports
Full-time equivalent (FTE) enrollment data
the U.S. Code.
of selected scholarship providers, and data from
are based on unpublished computations by
institutional financial aid officers.
IPEDS staff at the National Center for Education
Military. Expenditures for education are
Statistics (NCES).
reported for three types of programs: the
Nonfederal Loans
F. Edward Hebert Armed Forces Health
Nonfederal loan volumes are based on an
TABLES a and b
Professions Scholarship Program; Reserve
informal annual College Board survey of
The 1992 reauthorization of the Higher
Officers’ Training Corps programs for the Air
major private education loan providers and
Education Act eliminated the percent cap
Force, Army, and Navy/Marines; and higher
on information collected from staff of state-
on college costs beginning in 1993-94. The
education tuition assistance for the active duty
sponsored private loan programs.
constant-dollar values reflect an academic year
Armed Forces.
Consumer Price Index (CPI) adjustment.
Other Grants. Includes Higher Education
TABLE 1b
FIGURE 1
Grants for Indian Students; American Indian
Constant dollar figures are based on data from
Scholarships; Indian Health Service Scholar-
Table 1a. See page 27 for a more complete
Based on Tables 1a and 1b, and Table 2.
ships; National Science Foundation predoctoral
explanation of constant-dollar conversions.
Academic Year 2006 = 2006-07
fellowships (minority and general graduate);
TABLE
Federal Campus-Based aid includes SEOG,
National Health Service Corps Scholarships;
FWS, and Perkins Loans.
National Institutes of Health predoctoral
The breakdown of aid between undergraduate
Other Federal Programs include LEAP, Military
individual awards; the Jacob K. Javits Fel ow-
and graduate students is based on the NPSAS
and Veterans Aid, Other Grants, and Other
ship Program; and col ege grants provided to
when not available from other sources.
Loans.
volunteers in the AmeriCorps national service
TABLE
programs (funding began in 1994-95).
A section on combined unsubsidized and
Education Tax Benefits include federal Hope
and Lifetime Learning credits and estimated
Other Loans. Includes amounts loaned
subsidized Stafford Loans has been added at the
tax savings from the federal tuition and fees
under the Health Professions Student Loan
beginning of both the undergraduate and graduate
deduction.
Program, the Health Education Assistance
sections of Table 4. The figures reported here are
Loan Program, and the Nursing Student Loan
based on the total number of individual Stafford
FIGURES a and b
Program.
borrowers, eliminating the double counting of
Nonfederal student loans are not included in
Education Tax Benefits. Data on education
students participating in both programs.
Figures 2a and 2b, which include only funds
tax credits are Internal Revenue Service
TABLE
involving at least minimal subsidy. Federal
estimates of the volume of Hope and Lifetime
Four-year institutions include public
Loans include Perkins Loans together with
Learning credits for tax years 1998 and later.
institutions offering bachelor’s and/or graduate
Stafford and PLUS Loans.
Only amounts claimed on taxable returns are
degrees. Two-year institutions include public
included in Trends. Beginning in 2002, estimates
FIGURES a and b
institutions of any other program length from
of tax benefits also include the federal tuition
Based on data from Table 1b.
six months to three years. For-profit institutions
and fees deduction. Amounts deducted are
may be of any program length.
FIGURES a and b
reported annual y in the IRS Statistics of Income.
Income categories are based on quartiles
Associated tax savings are estimated by the
Loan figures include Stafford subsidized,
of families with heads ages 45–54 in U.S.
Col ege Board based on the marginal tax rates
Stafford unsubsidized, and PLUS Loans made
Census data. Aid for 1992-93 is based on 1991
applying to the taxable income of the taxpayers
through both the Federal Family Education
income: Low income equals less than $30,000,
in each income bracket claiming the deduction.
Loan Program (FFELP) and the William D. Ford
low–middle income equals $30,000 to $49,999,
Amounts are attributed to the academic year
Federal Direct Student Loan Program (FDSLP).
middle–high income equals $50,000 to $69,999,
beginning in the calendar year during which the
For the first time this year, loan dollars reported
high income equals $70,000 or higher. Aid for
tax benefit was claimed. For example, the tax
here are based on disbursements rather than
1995-96 is based on 1994 income: Low income
benefit counted as student aid in 2005-06 is the
gross commitments.
equals less than $32,500, low–middle income
amount claimed on 2005 tax forms. Estimates
equals $32,500 to $54,999, middle–high income
for 2006 are based on earlier data.
equals $55,000 to $79,999, high income equals
Trends in Higher Education Series
$80,000 or higher. Aid for 1999-00 is based
Terminology
CPI Table
on 1998 income: Low income equals less than
$37,500, low–middle income equals $37,500 to
FWS
= Federal Work-Study
Academic
CPI
Year
(1982-84=100) Factor
$62,499; middle–high income equals $62,500 to
FFELP = Federal Family Education Loan
1996-97
158.9
1.2848
$92,499, high income equals $92,500 or higher.
Program
Aid for 2003-04 is based on 2002 income: Low
FDSLP = William D. Ford Federal Direct
1997-98
161.8
1.2622
income equals less than $40,000, low–middle
Student Loan Program
1998-99
164.6
1.2407
income equals $40,000 to $69,999, middle–high
PLUS
= Parent Loans for Undergraduate
1999-00
169.3
1.2059
income equals $70,000 to $99,999, high income
Students
2000-01
175.1
1.1659
equals $100,000 or higher.
SEOG = Federal Supplemental Educational
2001-02
178.2
1.1456
FIGURE
Opportunity Grant
2002-03
182.1
1.1211
Loans include FFELP, FDSLP, Perkins Loans,
LEAP
= Leveraging Educational Assistance
2003-04
186.1
1.0970
other federal loans, and nonfederal loans as
Partnerships
2004-05
191.7
1.0650
surveyed for this report. Although not included
ACG
= Academic Competitiveness Grants
2005-06
199.0
1.0259
in the student aid total, nonfederal loans
SMART = National Science and Mathematics
2006-07
204.2
1.0000
are included here to represent total student
Access to Retain Talent Grants
borrowing.
Sources
Grants include Pell, SEOG, ACG, SMART,
Academic year: July 1 to June 30
Campus-Based Aid (FWS, Perkins, and
LEAP, Veterans, military and other grants, state
Subsidized Stafford Loans = Need-based
SEOG)
grants, institutional grants, and private and
federal student loans for which the federal
U.S. Department of Education, Office of Postsec-
employer grants.
government pays the interest while the student
ondary Education Policy, Budget, and Analysis
Grant and loan amounts for graduate and
is in school and during a six-month grace
staff. Federal Campus-Based Programs Databook.
undergraduate students are based on data in
period thereafter.
Education Tax Benefits
Table 6.
Unsubsidized Stafford Loans = Non-need-based
federal student loans guaranteed by the federal
Internal Revenue Service, Individual Income Tax
FIGURE
government but with interest accruing during
Returns, Preliminary Data 2004; Individual Income
Based on Tables 7a and 7b data and data online
the in-school time period.
Tax Returns, Al Returns, Table 3.3 and additional
at collegeboard.com/trends.
Statistics of Income sources; Lutz Berkner and
Current dollars: Actual dollar amounts in the
Christina Wei, Student Financing of Undergradu-
FIGURE
relevant year.
ate Education 2003-04, NCES 2006-186.
Based on NASSGAP annual survey results.
Constant dollars: Dollar amounts adjusted
for inflation. For example, a dollar amount
Federal Family Education Loan and Ford
FIGURES a and b
from 2000 reported in constant 2006 dollars
Direct Student Loan Programs
Based on Table 3 and Tables 8a and 8b. Tuition
is increased by the amount by which the
Unpublished data from the U.S. Department of
and fees and room and board data are from
Consumer Price Index rose between 2000
Education, Policy, Budget, and Analysis staff and
Trends in Col ege Pricing 2007.
and 2006. This adjustment removes spending
the National Student Loan Data System (NSLDS).
FIGURES 10a, 10b, and 10c
increases attributable only to inflation.
LEAP and State Grant Programs
Data on institutional grant aid by sector,
Full-Time Equivalent (FTE) Students:
2006-07: Preliminary figures reported by
selectivity, and family income levels are from the
Enrollment numbers based on a federal formula
NPSAS
20 states with largest grant appropriations.
: 2004. Calculations by the Col ege Board.
that counts each part-time student as equivalent
to approximately one-third of a full-time
Figures for remaining 30 states, the District of
FIGURE 1
student.
Columbia, and Puerto Rico were estimated by
Tuition and fee data are from the College Board
the College Board.
Annual Survey of Col eges.
General Notes
1988-89 to 2005-06: 20th through 39th Annual
Median family income data for the 45–54
• Components may not sum to totals due to
Survey Reports of the National Association of
age category are used because they are most
rounding.
State Student Grant and Aid Programs.
representative of families with dependents in
• Aid is reported by the academic year in which Military
college. This statistic is not representative of
it is awarded.
independent students.
• For more detailed historical data, see the
F. Edward Hebert Armed Forces Health Profes-
Excel files on the College Board’s Web site at
sions Scholarship amounts were obtained from
FIGURES 1a and 1b
www.collegeboard.com/trends.
the Office of the Assistant Secretary for Defense
Data on assets in state savings plans and
(Health Affairs). ROTC program data were
guaranteed tuition plans were provided by
A Note on Conversion
obtained separately from the Air Force, Army, and
the National Association of State Treasurers,
The Consumer Price Index for all urban
Navy program offices. The Education Policy Direc-
College Savings Plans Network.
dwellers (the CPI-U) is used to adjust for
torate of the Office of the Secretary of Defense pro-
inflation. Updated CPI data are available
vided Armed Forces tuition assistance amounts.
FIGURES 1a and 1b
from the Bureau of Labor Statistics Web site
Distribution of education tax credits and tuition
(http://stats.bls.gov/cpihome.htm). We have
Other Grants and Loans
and fee deductions by adjusted gross income
used an academic base-year calculation for
The data were collected through conversations
levels is from Statistics of Income, Individual
2006-07 based on the average CPI from July
and correspondence with the officials of the
Income Tax Returns, Preliminary Data, 2005;
2006 through June 2007.
agencies that sponsor the programs.
Table 3.3, Individual Income Tax Returns, Tax
In the following CPI Table, the factor column
Year 2005; and estimations by the College Board.
provides the user with a multiplication factor
Pell Grant Program
Tax savings from the tuition and fee deduction
equal to that of CPI (base year) divided by CPI
Data from Policy, Budget, and Analysis Staff,
are based on the marginal tax rates applicable to
(current year). Multiplication of the current-year U.S. Department of Education. Other data from
filers with the levels of taxable income associated
figure by the associated factor yields a constant-
Pell Grant End-of-Year Reports.
with the returns on which the deduction was
dollar result.
claimed (http://www.irs.gov/pub/irs-soi/05inrate.
Veterans Benefits
pdf). Only credits and deductions reported on
Benefits Program series (annual publication for
taxable returns are included. This results in
each fiscal year), Office of Budget and Finance,
estimates of tax benefits that are lower than those
U.S. Veterans Administration, and unpublished
found in some other sources.
data from the same agency.
Trends in Student Aid 2007
The Washington Office of the College Board
conducts research relevant to public policy issues
in education. The office is located at 1233 20th
Street NW, Suite 600, Washington, DC 20036-
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This report is available in PDF format on the Web:
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students to college success and opportunity.
Founded in 1900, the association is composed of
more than 5,200 schools, colleges, universities,
and other educational organizations. Each
year, the College Board serves seven million
students and their parents, 23,000 high schools,
and 3,500 colleges through major programs
and services in college admissions, guidance,
This report provides the most recent and
assessment, financial aid, enrollment, and
teaching and learning. Among its best-known
complete statistics available on student aid
programs are the SAT®, the PSAT/NMSQT®, and
in the United States. Detailed historical data
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. Data in
For further information, visit
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published data, in addition to estimates for the
© 2007 The College Board. All rights reserved. College
2006-07 academic year.
Board, Advanced Placement Program, AP, SAT, and
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Board. connect to college success is a trademark owned
The College Board is grateful to the many staff
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