WASHINGTON (AP) — Just as incoming freshmen are buying last-minute beanbag chairs for the dorm room, and just as a new law ties future loan rates to the market, the Education Department reports that more college students are receiving federal financial aid.
Meanwhile, it says, the aid they get from their states or their schools is flat or declining.
The department reported Tuesday that:
>> 71 percent of all undergrads got some type of financial aid in 2011-12, up from 66 percent four years earlier.
>> 42 percent got federal grants, up from 28 percent. And 40 percent got federal loans, up from 35 percent.
>> 15 percent got state grants and 20 percent got a grant from their school, figures that essentially haven't changed since the 2007-08 school year.
>> The average student got $10,800 in aid of all kinds — including federal and state grants and loans, work-study jobs and veterans' benefits — which was up from $9,100. The biggest increase was in federal Pell Grants, which go to low-income students: 41 percent of all undergraduates got a Pell, up from 27 percent.
“I think these last four years were very tough for states, and certainly we weren't surprised” at the numbers, said Jack Buckley, head of the Education Department's statistics branch.
Earlier this month, President Barack Obama signed into law a measure — the product of a summer's worth of wrangling in Congress — that restored lower interest rates for millions of college students borrowing from Uncle Sam.
Without it, rates on new subsidized Stafford loans would have doubled to 6.8 percent. Undergraduates this fall will borrow at a 3.9 percent rate for subsidized and unsubsidized loans, graduate students at 5.4 percent and parents at 6.4 percent.
What's different is that rates are now tied to financial markets. They are locked in for each school year's loans, but in following years the borrowing could become more expensive as the economy continues to improve and rates rise with it.
All told, the law covers an estimated 18 million loans totaling some $106 billion.
Meanwhile, the new Education Department data underlines the unsurprising news that college costs are still going up:
>> In-state tuition at community college jumped almost 6 percent, to an average of $3,131 last year. In-state tuition at a public, four-year college was up 5 percent, averaging $8,655. For private, four-year schools the average was up 4 percent, to $29,056.
>> That's not all. According to a College Board survey, the price of housing and food is even higher than tuition for in-state students at public universities. Counting food, housing, books, supplies and transportation, the total cost to attend an in-state public college averaged $17,860 last year.
Education Secretary Arne Duncan called the data “a reminder that we need state policy-makers and individual colleges and universities to do their part in taking action against rising college tuition.”
“Increasing federal student aid alone will not control the cost of college,” he said. “All of us share responsibility for ensuring that college is affordable.”
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