Rising college prices increase demand for federal financial aid
WASHINGTON -- With college costs continuing to rise, more students are receiving federal financial aid, though state and institutional aid remains largely flat.
Data released Tuesday, Aug. 20, by the National Center for Education Statistics, a branch of the U.S. Department of Education, shows 71 percent of all undergraduate students received some type of financial aid in the 2011-12 school year. That is up from 66 percent four years earlier.
Forty-two percent of students received federal grants, up from 28 percent, and 40 percent received federal loans, an increase of 5 percentage points.
Meanwhile, 15 percent received state grants and 20 percent received a grant from the college or university they attend -- figures that have remained essentially unchanged since the 2007-08 school year.
The data comes just weeks after President Barack Obama signed a law restoring lower interest rates for millions of college students. The law links student loan interest rates to the financial markets, meaning rates will be lower this fall because the government can borrow money cheaply at this time. However, student loans could become more costly if the economy continues to improve, and interest rates increase.
The new NCES data shows 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 averaged $8,655, up 5 percent; and private, four-year school tuition and fees averaged $29,056, a 4 percent increase.
Those figures, however, cover only part of college costs. According to a College Board survey, the price of housing and food is even higher than tuition for in-state students at public universities. With the added costs of food, housing, books, supplies and transportation, the total cost to attend an in-state public college was $17,860 last year.
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