• Tuition and the Total Price of Attendance
• Financial Aid, Price of Attendance, and Income
• Financial Aid by Type of Institution Attended
• The Sources of Financial Aid
• Student Loans
• Student Borrowing at Different Types of Institutions
• Summary

The two major types of financial aid awarded to students are grants and loans. In 1999–2000, 44 percent of all undergraduates received grants, for an average of $3,500. Twenty-nine percent of all undergraduates received student loans, averaging $5,100. In addition, 5 percent of all undergraduates held work-study jobs, earning an average of $1,700, and 7 percent received other types of aid, including veteran's benefits, job training and vocational rehabilitation funds, and federal PLUS loans to parents.

Many undergraduates received more than one type of financial aid in their aid "package." As shown in figure A, for 7 percent of all undergraduates, student loans were the only type of financial aid received; 22 percent took out loans but were also awarded grants or other aid; and 27 percent had aid packages that included grants, work-study, or other aid, but no loans. Those who had aid packages consisting of loans and other aid averaged $10,600 in total aid, compared with $5,200 for those with loans only and $2,900 for those without loans.

Thirty-nine percent of all undergraduates were enrolled full time for a full academic year in 1999–2000, but the proportion varied by type of institution, from more than one-half of the undergraduates at 4-year institutions to about one-fifth at public 2-year institutions. Figure B shows that among full-time, full-year undergraduates, about three-fourths (73 percent) relied on some type of financial aid to help pay for their postsecondary education, receiving an average of $8,500

.

Within an institution, full-time, full-year students usually have the highest educational expenses because they are charged the full tuition price and incur other education-related expenses for a full academic year. As shown in figure C, the tuition and fees for full-time, full-year undergraduates in 1999–2000 averaged about $1,600 at public 2-year institutions, $4,300 at public 4-year institutions, $8,900 at private for-profit institutions, and $15,000 at private not-for-profit 4-year institutions. The tuition and fees at any particular institution within these sectors may vary considerably from these averages.

The total price of attendance is the sum of tuition and fees and estimated nontuition expenses such as room and board, books and supplies, transportation, and personal expenses while enrolled. For full-time, full-year undergraduates, the average total price of attendance in 1999–2000 was $9,100 at public 2-year institutions, $12,600 at public 4-year institutions, $18,400 at private for-profit institutions, and $23,600 at private not-for-profit 4-year institutions. Tuition and fees and nontuition expenses for the 62 percent of undergraduates enrolled part time or part year are much lower than these amounts.

The percentage of undergraduates receiving financial aid increased as the price of attendance rose, while the percentage receiving aid decreased as family income rose. These two patterns reflect the need analysis formula used to award financial aid. With the exception of some merit-based scholarships and some loan programs (notably, federal unsubsidized Stafford and PLUS loans), most financial aid programs are need based. Low-income students who have limited resources will usually qualify for need-based aid at any price of attendance; high-income students will only qualify for need-based aid if they are attending institutions with a high price of attendance. About three-fourths of all low-income dependent undergraduates (those with a family income of less than $30,000) received financial aid in 1999–2000, compared with about one-half (48 percent) of high-income dependent undergraduates (those with a family income of more than $80,000).

The percentage of undergraduates receiving financial aid, the types of aid received, and the average amounts varied by the type of institution attended, as shown in figure D. At public 2-year institutions, 38 percent of all undergraduates received financial aid in 1999–2000, with an average award of $2,300. One-third (33 percent) of the public 2-year students received a grant (averaging $1,600), and 7 percent took out a student loan (averaging $3,300). These percentages and average amounts were lower than those in any other sectors, reflecting the lower tuition and the high percentage of part-time and part-year students (81 percent) at public 2-year institutions.

At public 4-year institutions, 62 percent of all undergraduates received financial aid, with an average award of $6,200. The percentage awarded grants was higher than the percentage taking out student loans (46 vs. 40 percent), but the average grant amount was lower than the average loan amount ($3,200 vs. $4,800).

At private not-for-profit 4-year institutions, 76 percent of all undergraduates received financial aid, and the average amount was $11,600. About two-thirds of undergraduates (66 percent) had grants, and one-half took out student loans. The average grant amount was higher than the average loan amount ($7,000 vs. $6,200).

At private for-profit institutions, 85 percent of undergraduates received financial aid, including 67 percent with loans and 60 percent with grants. Students enrolled at private for-profit institutions were more likely to be low income than those at the other types of institutions.

As shown in figure E, undergraduates with loans were most likely to receive them from the federal government: in 1999–2000, the percentage of undergraduates taking out federal loans (28 percent) was much higher than the percentages borrowing through state (1 percent), institutional (1 percent), and private commercial or nonprofit sources (3 percent).

Undergraduates with grants, on the other hand, were more likely to receive them from a variety of sources. More undergraduates were awarded grants from the federal government (23 percent) than from any other source, but 17 percent received grants from institutional sources, 14 percent from state sources, and 7 percent from private sources. Low-income dependent undergraduates were more likely to receive grants from the federal government than from any other source. Middle-income dependent undergraduates were more likely to receive grants from state and institutional sources than from federal or private sources. High-income dependent undergraduates were more likely to receive grants from state, institutional, and private sources than from federal sources. Both low-income and middle-income independent undergraduates were more likely to receive grants from the federal government than from any other source.

Among all undergraduates, federal grants were awarded to 17 percent of those at public 2-year institutions, about one-quarter of those at public and private not-for-profit 4-year institutions, and 53 percent of those at private for-profit institutions. At private not-for-profit 4-year institutions, 46 percent of all undergraduates received institutional grants, a higher percentage than at any other type of institution. Undergraduates at these institutions also received a larger average institutional grant award ($6,600) than those at any other type of institution.

Among undergraduates who borrowed in 1999–2000, nearly all (97 percent) took out federal student loans; 13 percent took out nonfederal loans, usually in combination with federal loans. The average federal student loan was $4,600.

The largest source of federal student loans is the Stafford loan program, which offers students two types of loans, subsidized and unsubsidized. Subsidized Stafford loans are awarded on the basis of need and are interest free to students while they are enrolled. Unsubsidized Stafford loans require no need test, but charge interest while students are enrolled. Depending on their financial need, students may receive subsidized loans, unsubsidized loans, or both types. Stafford loans have annual loan limits that vary by students' class level and dependency status. Students may borrow more at higher class levels, and independent students may borrow about double the amount available to dependent students at the same class level.

About one-half (48 percent) of Stafford borrowers took out need-based subsidized loans only, 17 percent took out unsubsidized loans only, and 36 percent took out both. Independent undergraduates were more likely than dependent undergraduates to take out a combination of subsidized and unsubsidized loans (58 percent vs. 21 percent), and the average Stafford loan was higher for independent than for dependent undergraduates ($5,500 vs. $3,800). Among dependent Stafford borrowers, 69 percent borrowed the maximum annual amount. Among independent borrowers, whose annual loan limits were about double those for dependent borrowers, 27 percent borrowed the maximum.

The student loans that undergraduates took out to pay for educational expenses in 1999–2000 may represent only a portion of the cumulative amount that they had borrowed for their undergraduate education. Among all undergraduates enrolled in postsecondary education, 42 percent had borrowed through the federal student loan programs at some time, either in that academic year or in prior years, with an average cumulative amount of $9,900. Among the seniors who received a bachelor's degree at any 4-year institution in 1999–2000, 62 percent had taken out a federal student loan at some time, and for those students, the average cumulative amount was $16,900.

While only 7 percent of all public 2-year undergraduates took out a federal student loan in 1999–2000 (borrowing an average of $3,100), 23 percent had taken out a federal student loan at some time, either in the 1999–2000 academic year or earlier, borrowing a cumulative amount of $6,300, on average. Many students had already repaid their federal loans, probably because they had borrowed only in prior years and had spells in which they were not enrolled; 17 percent still had outstanding federal loan debts.

About one-half (52 percent) of all undergraduates attending public 4-year institutions in 1999–2000 had borrowed through the federal student loan programs at some time, averaging a cumulative amount of $11,000 in federal loans. Sixty percent of those who attained a bachelor's degree at a public 4-year institution in 1999–2000 had taken out a federal student loan at some time as an undergraduate, with a cumulative average of $16,100 in federal loans.

At private not-for-profit 4-year institutions, 61 percent of undergraduates had received a federal student loan at some time, with a cumulative average of $12,000. About two-thirds (66 percent) of the graduating seniors at private not-for-profit 4-year institutions had borrowed through the federal student loan programs as undergraduates, having received $18,000, on average, by the completion of their bachelor's degrees.

Financial aid played a major role in the financing of undergraduate postsecondary education in 1999–2000. More than one-half of all undergraduates received some type of financial aid. More undergraduates received grants than loans to help pay for their education, but the average grant amount was less than the average amount borrowed. The average amounts of financial aid, however, varied considerably by the type of institution and price of attendance, as well as the attendance status and family income of the student. At public 2-year institutions, where students had a lower average price of attendance, most of the aided students did not take out student loans. At private not-for-profit 4-year institutions, where students had a higher average price of attendance, about one-half of undergraduates took out student loans, but most of them also received a substantial amount of grant aid.

More undergraduates received grants from the federal financial aid programs than from any other single source, but states, postsecondary institutions, and private organizations were also important sources of grant aid to undergraduates. Low-income dependent undergraduates were more likely to receive federal grants; middle-income dependent undergraduates were more likely to receive grants from state and institutional sources than from federal sources. High-income dependent undergraduates were more likely to receive grants from state, institutional, and private sources than from federal sources. Nearly all of the undergraduates who borrowed, however, took out loans through the federal student loan programs. On average, undergraduates borrowed about $5,100 to pay for educational expenses in 1999–2000. The cumulative federal loan amounts that undergraduates had ever borrowed were about twice this amount. Two-fifths of all undergraduates enrolled in 1999–2000 had borrowed through the federal student loan programs at some time, and their average cumulative federal loan was almost $10,000. Three-fifths of all the graduating seniors at 4-year institutions in 1999–2000 had borrowed through the federal student loan programs at some time, and their average cumulative federal loan was almost $17,000.