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New NCES Report Shows Grants Cover a Large Portion of Total College Costs for First-time Students

April 17, 2012

The NCES report, "Enrollment in Postsecondary Institutions, Fall 2010; Financial Statistics, Fiscal Year 2010; and Graduation Rates, Selected Cohorts, 2002-07," is based on the 2011 Student Financial Aid (SFA) component of the Integrated Postsecondary Education Data Survey (IPEDS). All institutions that enroll undergraduates and participate in the federal student financial aid programs must complete the SFA component. According to these data, there were approximately 3.3 million first-time, full-time undergraduate students at U.S. higher education institutions in academic year 2009-10. Of these, nearly 82 percent received some form of financial assistance to pay their postsecondary expenses. Nearly half all first-time freshmen received federal grants, while one quarter were awarded grants from state or local governments and 29 percent received grants from their educational institutions.

These grant awards substantially lowered the actual dollar amount paid by aid recipients. At four-year public colleges and universities, the average total listed price of attendance (before grants were considered) for grant awardees was $16,873. Grants from federal, state/local, and institutional sources reduced the attendance price to $10,175. For grant recipients who attended four-year private non-profit institutions, grant aid lowered the average cost of attendance from about $32,700 to $16,700.

Net Price Varies by Income Level

Because many grants are targeted to students from low-income families, students' "net price" (total college costs minus grant aid) varied by income level. At four-year public colleges and universities, the average net price of attendance for first-time freshmen from families with income below $30,000 who received grant awards was $7,834. This compares with an average of $12,016 for those from families with income of $48,001 to $75,000, and $14,601 for those from families with income of $75,001 to $110,000. At private non-profit institutions, the average net price was actually slightly lower for those from families with income of $30,001 to $48,000 ($14,331) than for those with income below $30,000 ($15,561). This may have occurred because a slightly higher share of institutionally funded aid was directed to those from somewhat higher-income families. However, those from the highest income families (more than $110,000) still faced the highest net average prices ($21,300).

Revenue and Expenditure Data

The report also provides information on college and university revenue and expenditures during fiscal year 2010. During the year, four-year public colleges and universities reported total revenues of $238.4 billion. State and local government appropriations accounted for about 20 percent of the total funds, while tuition and fee revenue (net of any amounts returned to students for institutionally funded financial aid) represented 18 percent, and total grants and contracts from all sources (except Federal Direct Student Loans) were 16 percent. In contrast, four-year private non-profit institutions were much more dependent on funds from tuition and fees. These schools reported $144.7 billion in total revenue, of which 33 percent came from net tuition and fee dollars, 10 percent was derived from grants and contracts, and less than 1 percent came from state and local appropriations.

Public four-year institutions reported about $221.6 billion in total expenditures. The largest expense category was instruction (nearly 30 percent), followed by research (13.8 percent). Private non-profit institutions also reported a high proportion of their total expenditures in these categories (32.7 percent and 11.2 percent, respectively).

The full report is available for no charge from the NCES website.


Ken Redd
Director, Research and Policy Analysis