Optimizing Financial Education Utilization

Title

Trends in Student Aid 2019

Authors

College Board

Document Type

Issue/Research Brief/Blog

Publication Date

11-2019

Keywords

financial status and behavior, students in higher education, federal financial aid policy, student loans, student debt, Grad PLUS loans, income-driven repayment plans, scholarships and grants

Abstract

Trends in Student Aid 2019 reports on the funds students and families use to supplement their own resources to pay for the prices documented in Trends in College Pricing 2019.

Both total annual education borrowing and borrowing per full-time equivalent (FTE) undergraduate declined (after adjusting for inflation) in 2018-19 for the eighth consecutive year.

The federal government provided 62% of all student aid in 2018-19; the composition of that aid has changed over time, with a declining share distributed on the basis of financial need. As aid to veterans and active-duty military has increased, Pell Grants to low- and moderate-income students have fallen from 80% of federal grant aid in 1998-99 to 68% in 2018-19. The introduction of and growth in unsubsidized loans, PLUS loans for graduate students and parents of undergraduates, and the elimination of subsidized loans for graduate students have left less than a quarter of federal loans based on students’ financial circumstances. The implementation and expansion of education tax credits have reinforced this trend.

Similarly, state and institutional grant aid is allocated partially on the basis of students’ financial circumstances and partially on the basis of other criteria. Since 2011-12, about a quarter of state grant aid has been distributed without regard to financial need (Figure 23A); the same is true of a significant share of institutional grant aid (Figures 25A, 25B).

Some of the non-need-based aid—likely including much of the aid to veterans—does help meet financial need. But keeping this distinction—and the shift over time in the federal government’s approach—in mind is critical to putting the following data into context.

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