Grants and loans are forms of federal financial support for undergraduate students, about two-thirds of whom were under the age of 25 in 2009 (Aud et al. 2011, table A-39-1). Federal grants, which do not need to be repaid, are available to undergraduates who qualify by income, whereas loans are available to all students. In academic year 2007–08, a greater percentage of full-time, full-year undergraduate students received federal aid of any kind at private for-profit institutions (94 percent) than at private not-for-profit institutions (70 percent) and public institutions (57 percent). This pattern held true for part-time or part-year undergraduate students as well as when looking only at aid from Title IV programs, which accounts for nearly all of the federal aid. Title IV refers to the section of the Higher Education Act of 1965 that covers the administration of the federal student financial aid program. Included under Title IV are Pell grants, Supplemental Educational Opportunity Grants (SEOGs), work-study, Perkins loans, Stafford loans, and Parent Loans for Undergraduate Students (PLUS). Title IV does not include private loans, grants, and scholarships, nor does it include state-level grants and loans. Pell grants are need-based grants awarded to undergraduates and are intended to be a financial base to which other financial awards can be added.
Looking at specific types of aid, private for-profit institutions had the greatest percentage of full-time, full-year students receiving Pell grants (62 percent) in 2007–08, followed by public institutions (30 percent) and private not-for-profit institutions (28 percent). In 2007–08, about 16 percent of full-time, full-year students at private for-profit institutions received SEOGs, which are campus-based grants that are intended to supplement Pell grants, compared with 13 percent of students at private not-for-profit institutions and 6 percent of students at public institutions.
As with Pell grants and SEOGs, private for-profit institutions had a greater percentage of full-time, full-year students receiving Stafford loans (89 percent) than either private not-for-profit institutions (59 percent) or public institutions (40 percent). Stafford loans include need-based subsidized loans and unsubsidized loans that are not need-based. In contrast, private not-for-profits had the greatest percentage of students receiving aid from the Perkins loan program and from work-study, followed by public institutions and private for-profit institutions. (The Perkins loan program is a campus-based, low-interest loan program for students who demonstrate financial need.) Overall, a greater percentage of full-time, full-year undergraduates received federal aid of any kind (63 percent) than did part-time or part-year undergraduates (39 percent).