More Than Half of U.S. College Students Get Federal Aid

Photographer: John Walker/Fresno Bee/MCT via Getty Images

Fifty-seven percent of U.S. undergraduates obtained grants, loans and other benefits in 2011-2012, up from 47 percent in 2007-2008. Close

Fifty-seven percent of U.S. undergraduates obtained grants, loans and other benefits in... Read More

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Photographer: John Walker/Fresno Bee/MCT via Getty Images

Fifty-seven percent of U.S. undergraduates obtained grants, loans and other benefits in 2011-2012, up from 47 percent in 2007-2008.

More than half of U.S. undergraduates receive federal financial aid, demonstrating their increasing reliance on taxpayers as college costs escalate, federal data show.

Fifty-seven percent obtained grants, loans and other benefits in 2011-2012, up from 47 percent in 2007-2008, the last time the government tallied those figures, according to a U.S. Education Department report today. It marks the first time a majority of students relied on U.S. aid since the agency started tracking the data in 1987.

The government released the data before President Barack Obama this week is scheduled to take a bus tour of New York and Pennsylvania campuses to discuss making college more affordable. The administration has proposed giving more aid to schools with moderate tuition increases and strong educational outcomes --and yanking funding from those with the highest.

“All of us share responsibility for ensuring that college is affordable,” U.S. Education Secretary Arne Duncan said in a statement. The report “is a reminder that we need state policy makers and individual colleges and universities to do their part in taking action against rising college tuition.”

Forty percent of undergraduates took out federal student loans in 2011-2012, up from 35 percent in 2007-2008, according to the new data. Forty-two percent received federal grants, up from 28 percent.

While federal grants flowed primarily to low-income students, wealthier families received bigger scholarships from colleges than poorer ones. On average, dependent undergraduates from families earning $100,000 or more received $10,200 in grants, compared with $8,000 from families earning less than $20,000. About an equal percentage of students from high- and low-income backgrounds -- just under 40 percent -- received grants from colleges.

Colleges are using financial aid to lure rich students in pursuit of prestige and revenue, shortchanging the poor, according to a May report from the New America Foundation, a Washington nonprofit research group.

To contact the reporter on this story: John Hechinger in Boston at jhechinger@bloomberg.net

To contact the editor responsible for this story: Lisa Wolfson at lwolfson@bloomberg.net

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