More Students Resorting to Federal Financial Aid, DOE Data Shows

New data released by the US Department of Education shows that families are increasingly relying on both loans and federal grants to afford college. Libby A. Nelson of Politico reports that during the 2011-12 academic year, for the first time, students who were receiving some form of federal student aid, either loans or grants, outnumbered the students who were not.

In total, 57% relied on at least some student aid in the last academic year for which the data is available. This also represents the first look in on the data collected from students who entered college after the 2007-2008 economic recession.

The numbers – which are released by the DOE every four years to provide an overview of the tools students and their families use to make college affordable – are likely to make their way into future speeches by President Barack Obama as he talks up plans to put college within reach for more families.

“Federal grants and loans help students realize the American dream, opening the door to opportunity for students who would never be able to get a college education without financial support,” Education Secretary Arne Duncan said in a statement on the findings, later continuing: “But the data also shows that increasing federal student aid alone will not control the cost of college. All of us share responsibility for ensuring that college is affordable.”

The proportion of students relying on federal financial aid has been growing steadily for years, said Jack Buckley, commissioner of the National Center for Education Statistics.

“By definition, a lot has changed in four years, and that’s going to be reflected in these numbers,” Buckley said in a call with reporters Monday.

According to the report, more students are now resorting to student debt to pay tuition, and that debt makes up a larger chunk of their financial aid packages. This is despite the fact that the federal government has expanded its grant programs over the last few years.

Students from low-income families aren’t the only ones borrowing more. There has been an increase in the number and amount of borrowing among students from middle- and higher-income families, too.

The numbers also show the effect of skyrocketing spending on the Pell Grant. About 41 percent of all students received the grant in 2011-12, a 14 percentage point increase. Congress expanded the grant program several times between 2007 and 2009. As the economy faltered and incomes fell, spending on Pell grew from $12.8 billion in 2007 to $35.6 billion in 2011 before falling slightly last year.

Students at for-profit colleges were especially reliant on federal financial aid programs. More than three-quarters of students at for-profit colleges granting associate or bachelor’s degrees received federal student aid. And an additional 10 percent of students at for-profit colleges granting bachelor’s degrees received veterans’ benefits — a higher proportion than at public or private nonprofit colleges.

While low-income students can still turn to the federal government for grants, they’re less likely to receive this kind of aid from the schools themselves. Schools give grants to 39% of students from families making less than $20,000 and almost an equal percentage – 38% – to those from families with combined income of $100,000 and more.

The average grants were higher for the wealthiest students, who averaged $10,200 in college aid, than for the poorest, who got about $8,000.

Recent studies have found colleges are now as likely to give grants based on need as they are to give grants based on other factors — such as scholarship money that can be used to attract students who are academically or athletically talented.