Inequality, College, and Financial Aid

Previous posts have discussed higher education and inequality. Bloomberg reports:

More than half of U.S. undergraduates receive federal financial aid, demonstrating their increasing reliance on taxpayers as college costs escalate, federal data show.

Fifty-seven percent obtained grants, loans and other benefits in 2011-2012, up from 47 percent in 2007-2008, the last time the government tallied those figures, according to a U.S. Education Department report today. It marks the first time a majority of students relied on U.S. aid since the agency started tracking the data in 1987.

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Forty percent of undergraduates took out federal student loans in 2011-2012, up from 35 percent in 2007-2008, according to the new data. Forty-two percent received federal grants, up from 28 percent.

While federal grants flowed primarily to low-income students, wealthier families received bigger scholarships from colleges than poorer ones. On average, dependent undergraduates from families earning $100,000 or more received $10,200 in grants, compared with $8,000 from families earning less than $20,000. About an equal percentage of students from high- and low-income backgrounds -- just under 40 percent -- received grants from colleges.

Colleges are using financial aid to lure rich students in pursuit of prestige and revenue, shortchanging the poor, according to a May report from the New America Foundation, a Washington nonprofit research group.

Click here for the study, Undermining Pell. 

Also see a July study from Sallie Mae.