Two newly released reports from the American Council on Education (ACE) illustrate rapid growth in the federal student loan programs and the critical importance of the Pell Grant program, the nation's largest single source of need-based grant assistance.
The "2003 Status Report on the Federal Education Loan Programs" and the "2003 Status Report on the Pell Grant Program" provide comprehensive pictures of the history and current state of these programs. The reports analyze recently released data from the Department of Education's "Federal Student Loans Data Book," "Pell Grant End of Year Report" and the "1999-2000 National Postsecondary Student Aid Study."
Among the key findings of the report on the federal education loan programs:
* The federal education loan programs are now the single largest source of college financial assistance in the United States. In the 2001-2002 academic year, federal education loans accounted for three-quarters of all federal student aid and more than half of aid from all sources, or over $41 billion.
* Stafford subsidized loans account for nearly half (49 percent) of annual federal borrowing. Stafford unsubsidized loans and Parent Loans for Undergraduate Students (PLUS) represent 40 percent and 11 percent of annual borrowing, respectively.
* In 1999-2000, 28 percent of undergraduates had at least one Stafford loan: 23 percent borrowed a Stafford subsidized loan and 15 percent borrowed a Stafford unsubsidized loan.
* Twenty-nine percent of graduate students borrowed at least one Stafford loan in 1999-2000: 26 percent borrowed a Stafford subsidized loan and 22 percent borrowed a Stafford unsubsidized loan.
Among the key findings from the Pell Grant report:
* Today, the Pell Grant program provides approximately $11 billion in assistance annually to one-quarter of undergraduates.
* The purchasing power of the Pell Grant has declined since the late 1970s. In 1979-1980, the maximum grant covered 99 percent of the average price of tuition, fees and on-campus housing at a public two-year institution, 77 percent at a public four-year institution and 36 percent at a private not-for-profit college or university. Today, the maximum grant covers 68 percent, 41 percent and 16 percent respectively.
* Nearly half of all undergraduates apply for federal financial aid; 46 percent of aid applicants received a Pell Grant in 1999-2000. More than 80 percent of aid applicants with income less than $10,000 received a Pell Grant in 1999-2000, compared with only 2 percent of aid applicants with an income of $50,000 or more.
"The rapid growth and widespread use of these programs illustrate their importance to American college students," says Jacqueline E. King, director of ACE's Center for Policy Analysis and author of both reports.
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