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Business and Policy Areas
Business and Policy Areas

States Increase Student Aid Spending at Slower Rate

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.