States Increase Student Aid Spending at Slower Rate

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July 24, 2007

State spending on student financial aid increased by more than 7 percent in 2005-06--a slower rate than the 8 percent increase experienced in 2004-05, according to the National Association of State Student Grant and Aid Programs' 36th Annual Survey Report on state-sponsored student financial aid. States awarded $8.5 billion in state financial aid, the majority of which (82 percent) continues to be in the form of grants.

Other findings include:

Of the state grant funds awarded, 73 percent were need-based and 27 percent were non-need-based, the same percentage as seen in 2004-05.
State spending on aid in the form of grants climbed by 5.4 percent in 2005-06, while spending on nongrant aid surged by 15.6 percent. Loans and tuition waivers accounted for 69 percent of nongrant funds awarded.
California, Illinois, Indiana, New Jersey, New York, Pennsylvania, and Texas accounted for 65 percent of the total undergraduate need-based grant aid in the United States.
South Carolina, Washington, D.C., Georgia, New York, and Indiana provided the greatest amount of grant aid on a per capita basis.

The full results are available on the NASSGAP Web site.