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Thursday, August 22, 2013

Inequality, College, and Financial Aid

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.

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.