The following is a presentation prepared for NASFAAs 2006 Conference in Seattle, WA July 58, 2006

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The following is a presentation prepared for
NASFAAs 2006 Conference in Seattle, WAJuly 5-8,
2006
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National Association of Student Financial Aid
Administrators Presents
Federal Student Financial Aid A National
Profile of Title IV Student Aid Programs

Kenneth ReddDirector of Research and Policy
AnalysisNASFAA
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Presentation Answers the Questions

• What have been the recent trends in federal aid
  funding and recipients?
• How much has student loan debt changed?
• What is borrowers after-college debt burden?

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Federal Aid Programs Reviewed

• Federal Pell Grants
• Campus-Based Aid
• FSEOG, FWS, and Perkins Loans
• Federal Student Loans
• Stafford Subsidized and Unsubsidized Loans and
  PLUS

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A Few Overall Trends

• In 2004-05, Title IV-sponsored financial aid
  programs provided 54 of total financial aid
  awarded (77.8 billion of 142.7 billion).
• In 1994-1995, these programs provided 64 of
  total aid.
• Over the past decade, Title IV grants (Pell
  FSEOG combined) grew 78, but loans (Perkins,
  Stafford Sub, Stafford Unsub, and PLUS) increased
  92.
• Federal grant aid as a share of total aid
  declined from 12 to 10.

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Total Financial Aid Increased In Response to
Rising College Prices
Charges are for full-time undergraduate
students. Source The College Board, Trends in
College Prices, 2005.
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Total Pell Grant Spending Has Increased by 93 in
Inflation-Adjusted Dollars
Source The College Board, Trends in Student Aid,
2005.
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But the Maximum Pell Grant Has Only Grown 40
(Cost of Attendance at Public Colleges Up 42 in
the Same Period)
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A Higher Share of Middle-Income Students Have
Received Pell Grant
Percentage of Dependent Undergraduates Who
Received Pell Grants, by Income
Income levels and median income amounts are
adjusted for inflation. Less than 1.
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FSEOG Funding Has Essentially Been Flat When
Adjusted for Inflation Over the Past Ten Years
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More Middle-Income Students Are Also Receiving
More FSEOG Awards
Percentage of Dependent Undergraduates Who
Received FSEOG, by Income
Income levels and median income amounts are
adjusted for inflation. Less than 1.
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Federal Work-Study Dollars Increased 26
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More Middle-Income Students Are Also Receiving
More Work-Study Aid
Percentage of Dependent Undergraduates Who
Received FWS, by Income
Income levels and median income amounts are
adjusted for inflation.
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In Recent Years, Perkins Loan Total Funding Has
Declined Noticeably
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The Share of Students With Perkins Loans Appears
to Have Been Flat
Percentage of Dependent Undergraduates Who
Received Perkins Loans, by Income
Income levels and median income amounts are
adjusted for inflation.
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Federal Loan Borrowing (Particularly Through the
Stafford Unsub PLUS Programs) Has Jumped Since
1995
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139
189
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And Average Award Student Loan Awards Increased
52
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Source National Center for Education Statistics,
National Postsecondary Student Aid Studies, 1996,
2000, 2004.
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As A Result, Cumulative Federal Student Loan Debt
Rose 37
Source National Center for Education Statistics,
National Postsecondary Student Aid Studies, 1996,
2000, 2004.
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The Share of Stafford Unsubsidized Borrowers
Rose, Especially at the Upper-Income Levels
Percentage of Dependent Undergraduates Who
Received Stafford Unsub Loans, by Income
Source National Center for Education Statistics,
National Postsecondary Student Aid Studies, 1996,
2000, 2004. Median income amounts are
adjusted for inflation.
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While the Share of Middle-Income Students With
Stafford Subsidized Loans Rose Sharply
Percentage of Dependent Undergraduates Who
Stafford Sub Loans, by Income
Source National Center for Education Statistics,
National Postsecondary Student Aid Studies, 1996,
2000, 2004. Median income amounts are
adjusted for inflation.
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But the Percentage of PLUS Recipients at the
Upper-Income Levels Has Been Very Slight
Percentage of Dependent Undergraduates Who
Received PLUS, by Income
Source National Center for Education Statistics,
National Postsecondary Student Aid Studies, 1996,
2000, 2004. Median Income amounts are adjusted
for inflation.
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Despite the Cumulative Debt Amounts, the Majority
of Borrowers Who Entered Repayment Had Debt
Burdens Below 8
Sources National Postsecondary Student Aid
Study, 2004 National Association of Colleges and
Employers, 2004. Assumes a 5 loan interest
rate. Assumes a standard 10-year repayment term.
Loan burden is the percentage of gross monthly
salary used to repay loans. Assumes a 15-year
repayment term.
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Summary.

• More students have received Title IV aid as a
  result of rising college costs, but
• Much of this aid has been in the form of Stafford
  Unsubsidized Loans
• Much of the aid has been directed to students
  from relatively higher income families.
• Cumulative debt from federal sources alone has
  grown at least 37 (but may be higher because of
  the Unsubsidized borrowing).
• Student and parent borrowing have grown, but
  students may be carrying a higher share of the
  debt.
• Loan repayment debt burdens have remained low,
  but may increase due to future higher interest
  rates.

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