Total Financial Aid for College Students Declines Nearly 3 Percent in 2012-13
October 30, 2013
During the 2012-13 academic year, students attending higher education institutions received $238.5 billion in financial aid from all sources except private loans, according to the College Board's Trends in Student Aid 2013. About 78 percent of the total aid dollars was awarded to undergraduates.
The annual Trends in Student Aid report examines funding students receive from grants from federal and state governments, colleges and universities, employers, and other private sources. The report also looks at changes in federal and private student loans, federal education tax benefits, and Federal Work-Study (FWS) assistance. The report examines changes in funding levels in inflation-adjusted dollars annually and trends over time.
Declines in Federal Aid Funding
The 2013 report shows that total inflation-adjusted amounts awarded to all students (undergraduate and graduate/professional students combined) dropped 2.7 percent from 2011-12 to 2012-13. Much of this decline occurred in amounts awarded through the federal student loan programs, which fell nearly 8 percent—from $109.8 billion to $101.5 billion. Total federal loan dollars fell primarily because on July 1, 2012, graduate/professional students became ineligible to receive subsidized federal loans, on which the government pays the interest while students are in school. As a result, the total amount of subsidized federal loans awarded to all students fell 33 percent. In addition, the amount undergraduates received from the Federal Pell Grant program fell 5 percent, from $34 billion in 2011-12 to $32.3 billion in 2012-13, and total funding for FWS awards declined about 1 percent, from $986 million to $979 million. These declines were partially offset by an increase in total institutional grant aid (undergraduate and graduate/professional awards combined), which rose from $42.6 billion to $44.4 billion.
Despite the decline over the past year, a longer-term trend shows that total financial aid dollars have risen substantially. Between 2007-08 and 2012-13, total aid awarded increased by 49 percent. However, the composition of aid has changed substantially. Due to the recent decline in subsidized loan dollars, the share of aid that has come from federal loans has fallen from 47 percent in 2007-08 to 43 percent in 2012-13. In this same time span, the share of total aid coming from all grants rose from 39 percent to 42 percent. In addition, while Pell Grant funding fell in the prior year, over the past five years it doubled, and as a result the share of total grants that were federally funded increased from 37 percent to 46 percent.
Number of Federal Award Recipients Also Fall
The declines in total financial aid awards from key programs also led to decreases in number of students receiving awards. In 2012-13, 8.8 million students receiving Pell Grants, compared with 9.3 million in 2010-11. The number of students receiving FWS declined from 759,000 in 2002-03 to 697,000 in 2012-13, while the number of students who received federal loans dropped from 10.4 million to 10 million.
In contrast, the number of federal tuition tax beneficiaries grew sharply. An estimated 15.2 million tax filers benefited from federal education tax credits and deductions in 201112 (the most recent year of available data). The number of tax filers claiming tuition tax benefits grew 16 percent from 2010-11 to 2011-12.
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