Indicator 24: Financial Aid

The cost of a postsecondary education is a potential barrier to completing an undergraduate degree. Financial aid can help ease this burden. Financial aid includes assistance in the form of grants, loans, work-study, or any other type of aid. In the 2003-04 school year, the amount of financial aid received by undergraduate students varied by racial/ethnic group.

In 2003-04, a higher percentage of Black undergraduate students received financial aid than did White, Hispanic, and Asian/Pacific Islander undergraduates. Eighty-nine percent of full-time, full-year Black undergraduate students received financial aid, compared to 81 percent of Hispanic students, 74 percent of White students, and 66 percent of Asian/Pacific Islander students. Due to a large standard error, the percentage of American Indian/Alaska Native students receiving aid was not measurably different from that of Black students. A lower percentage of Asian/Pacific Islander students received aid than students of any other race/ethnicity.

Grants and loans are two primary forms of financial aid. Grants are a type of student financial aid that does not require repayment or employment. Grants include merit-only scholarships, tuition waivers, and employer tuition reimbursements. In contrast, loans require repayment and can be issued by federal, state, institutional, or private sector institutions. Loans also include federal PLUS loans²⁸ to parents, but do not include loans from family or friends to the student or commercial loans to parents (U.S. Department of Education 2004b).

In the 2003-04 school year, Black students received higher average amounts of total aid ($10,500), than White ($9,900) and Hispanic ($9,000) students. Hispanic students had a lower average amount of aid than did White, Black, and Asian/Pacific Islander students. Asian/Pacific Islander students received the highest amount of aid in the form of grants ($6,700). There were no differences between races/ethnicities in average amounts of loans received. White, Black, Hispanic, and American Indian/Alaska Native undergraduates received larger amounts of aid in the form of loans than grants.

The average amount of aid in any form awarded to White, Black, and Hispanic students increased from 1999-2000 to 2003-04. Over the same period, Black and Hispanic students experienced increases in aid in the form of both grants and loans, while White and Asian/Pacific Islander students experienced significant increases in aid through loans, but not grants.

View Table 24a
View Table 24b
View Figure 24

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