• Introduction
• Highlights

This report examines the differences among undergraduates who attended postsecondary institutions in states that provide different levels of state student financial aid. Specifically, the report describes students' aid types and sources, their price of attendance, and their personal characteristics. It examines the relationship between these variables and the undergraduates' probability of attending institutions in either a high or low state aid group.

The report uses data from the 1995-96 National Postsecondary Student Aid Study (NPSAS:96). NPSAS:96 is the fourth in a series of surveys conducted by the U.S. Department of Education, National Center for Education Statistics. NPSAS:96 represents students of all ages and backgrounds at all types of postsecondary institutions (from less-than-2-year institutions that provide short-term vocational training to 4-year colleges and universities) who were enrolled during the 1995-96 academic year. The NPSAS surveys provide information about the price of postsecondary education and how students pay that price.

The percentages and means presented in this report were produced using the NPSAS:96 Data Analysis System (DAS). The DAS is a microcomputer application that allows users to specify and generate their own tables from the NPSAS data. It produces the design-adjusted standard errors that are necessary for testing the statistical significance of differences shown in the tables.

A major percentage of postsecondary education funding is contributed by states. States provide most of this support to institutions, but some is in the form of financial aid to students. Most (93 percent) of state student aid is in the form of grants. State funds may be awarded directly to students or used to reduce tuition in public institutions. The amount of student aid provided varies among states.

Even though similarities may exist among states, each represents a unique set of circumstances. State politics, demographics, and historical traditions result in various higher education policies. This report divides states into two groups based on level of aid provided, and compares the high state aid group, states that provided $400 or more in financial aid per undergraduate, to the low state aid group, those that provided $100 or less in financial aid per undergraduate.^* The following states were included in the high state aid group: Georgia, Illinois, Indiana, Minnesota, New Jersey, New Mexico, New York, Pennsylvania, Vermont, and Virginia. The low state aid group consisted of Alabama, Alaska, Arizona, Delaware, the District of Columbia, Hawaii, Idaho, Montana, Nebraska, Nevada, New Hampshire, North Dakota, South Dakota, Texas, Utah, and Wyoming.

The results suggest that students attending institutions located in the high state aid group were charged a higher average tuition than those in the low state aid group (table A). Undergraduates attending any one of the three major institutional sectors (public 4-year; private, not-for-profit, 4-year; and public less-than-4-year) in the high state aid group also paid higher tuition than did those in the low state aid group. This comparison provides a chance to evaluate what other student characteristics might be associated with attending institutions in the high state aid group or the low state aid group.

Table A.—Average tuition and fees charged for undergraduates in the low and high state aid groups, by institutional type: 1996

Undergraduates in the high state aid group were more likely to attend private, not-for-profit, 4-year institutions than were those in the low state aid group (table B). They also were less likely to attend public less-than-4-year institutions than were those in the low state aid group.

Table B.—Percentage distribution of undergraduates in the low and high state aid groups, by institutional type: 1996

Undergraduates attending institutions in the high state aid group were younger and more likely to be dependent than those in the low state aid group. Undergraduates in the high state aid group were also less likely to be married and have dependents compared with those attending institutions in the low state aid group.

In two instances, undergraduates attending institutions in the two state aid groups did not differ from one another statistically. The percentage of enrolled dependent undergraduates with family incomes of $20,000 or less is a good measure of the presence of low-income students in postsecondary education. There was no significant difference in the percentage of low-income undergraduates attending institutions in the high state aid group compared with those in the low state aid group. The percentage of low-income undergraduates who were white, non-Hispanic also did not differ significantly between the two state aid groups. In both cases, 73 percent of the undergraduates were white, non-Hispanic. The percentage of enrollment supplied by low-income students and the percentage of enrollment represented by minority students both provide indicators of student access. The information from the high and low state aid groups suggests that state student aid along with the associated institutional characteristics did not have a direct effect on the enrollment of low-income students or minority students.

Undergraduates in the high state aid group were more likely to have received student aid than were those in the low state aid group. On average, aid recipients in the high state aid group received $5,810 and those in the low state aid group received $3,869. Those attending institutions in the high state aid group were more likely to have received loans, grants, and work-study awards.

Undergraduates in the high state aid group were also more likely to have received federal aid than were those in the low state aid group. Those in the high state aid group who received federal aid also received larger awards on average than those in the low state aid group.

Subtracting grant aid from tuition and fees results in net tuition. Undergraduates attending institutions in the high state aid group were charged an average tuition of $4,334 compared with $2,099 paid by those in the low state aid group. When all grant aid was subtracted, undergraduates in the high state aid group paid a mean net tuition of $2,947 compared with $1,553 paid by those in the low state aid group.

The mean net tuition paid by undergraduates attending public less-than-4-year institutions in the high state aid group was $639 compared with $316 paid by those in the low state aid group. However, undergraduates in the high state aid group did not pay a significantly higher net tuition in private, not-for-profit, 4-year institutions or public 4-year institutions.

Dependent undergraduates in every income category paid a higher net tuition if they attended institutions in the high state aid group than if they attended in the low state aid group. On average, dependent undergraduates with family incomes of less than $20,000 paid a mean net tuition of $2,648 in the high state aid group compared with $1,616 paid by those in the low state aid group. The only institutional sector in which dependent undergraduates with incomes of less than $20,000 paid a significantly higher net tuition in the high state aid group than in the low state aid group was public less-than-4-year institutions, $644 compared with $261.