Savanna Hoffman
The cost of higher education has never been higher, and neither has the need for financial aid. In 2023-24, undergraduate and graduate students in the US received a total of $256.7 billion in student aid. This includes grants, federal work-study, federal loans, and federal tax benefits. The average amount of student aid received varies depending on the student's race/ethnicity, gender, and attendance pattern. For example, non-Hispanic Black undergraduates and undergraduates of two or more races received higher average amounts of federal student aid than non-Hispanic White undergraduates in 2019-20. Additionally, 74% of undergraduates who identified as female received some form of financial aid, compared to 68% who identified as male.
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Federal student aid
One of the essential aspects of federal student aid is the Federal Application for Student Financial Aid (FAFSA). The FAFSA serves as a gateway for students to access financial assistance for their college education. In the 2022-23 cycle, the FAFSA received 17.045 million applications, with 4.399 million (25.8%) being first-time college students and the remaining 74.2% having prior college experience. This process is vital for students to tap into the available support and fund their college education.
Federal grants are a significant component of federal student aid. In the 2023-24 academic year, federal grant aid totalled $44.3 billion, including $31.4 billion in Pell Grants. Pell Grants, in particular, play a crucial role in supporting undergraduate students financially. However, it's important to note that the total Pell Grant expenditures have declined since their peak in 2010-11, when they reached $49.9 billion.
Federal loans are another vital aspect of federal student aid. In the 2023-24 academic year, federal student loans disbursed amounted to $82.776 billion. During this period, 6.348 million college students benefited from these federal loans, with an average loan award of $13,038.84. First-time, full-time undergraduates attending private, for-profit two-year colleges are the most likely to receive federal loans, with a rate of 71.1%.
The Federal Work-Study Program (FWS) is a distinctive element of federal student aid. It provides funds directly to institutions to facilitate campus-based work-study opportunities for students. The FWS can cover up to 75% of student wages, with an average annual award of $1,980. This program not only helps students financially but also provides them with valuable work experience.
In conclusion, federal student aid is a comprehensive system that combines grants, loans, and work-study programs to assist students in their pursuit of higher education. The utilization of federal student aid varies, with some students benefiting from multiple forms of assistance. The availability and accessibility of this aid play a pivotal role in shaping the educational landscape, ensuring that financial constraints do not hinder aspiring students from achieving their academic goals.
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State aid
In the 2023-24 academic year, Alabama awarded $57.45 million in state aid to its college students, while Alaska awarded $20.06 million. The average federal grant award to Alabama college students was $5,233.07, while in Alaska, it was $4,480.52. The average amount of state and local aid received by undergraduates across the US was $4,116.
The amount of state aid awarded can vary depending on the financial need of the student. State grants and scholarships may be listed on a student's financial aid award letter, with each state award described and the amount specified. This aid is often need-based, with a certain percentage of state aid in each state going towards need-based grants. For example, in Alabama, 81.9% of state aid is in the form of need-based grants, while in Alaska, this number is 28.55%.
In addition to state aid, there are also federal grants and loans available to students. In the 2023-24 academic year, the federal government disbursed $82.776 billion in student loans and $44.3 billion in grants. The average federal loan award was $13,038.84, while the average grant award was $9,300.
Overall, financial aid plays a crucial role in financing undergraduates' education, with nearly three-quarters of undergraduates receiving some form of financial aid in the 2019-20 academic year. The average amount of aid received was $14,100, with 55% of undergraduates receiving federal aid.
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Institutional aid
The first step to applying for institutional aid is completing the FAFSA, or Free Application for Federal Student Aid. While this does allow you to see what aid the government may give you, colleges and universities also use this form to determine what need-based aid, grants, loans, or scholarships they may offer you. It is recommended to also check if your school needs other forms, such as the CSS Profile, and to always check deadlines and other requirements.
In the 2023-24 academic year, federal programs disbursed $114.9 billion in student grants and loans. $82.776 billion of this was in federal student loans, with an average loan award of $13,038.84. Federal grant aid totalled $44.3 billion, including $31.4 billion in Pell Grants. The total amount of aid that undergraduate and graduate students received in 2023-24 from all grants, federal loans, tax credits, and federal work-study was $256.7 billion.
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Student loan debt
The amount of student loan debt also varies depending on the student's race and ethnicity. For the 2019-20 academic year, non-Hispanic Black undergraduates and undergraduates of two or more races received higher amounts of federal student aid on average ($9,700 each) compared to their non-Hispanic White counterparts ($8,800). Undergraduates who were Hispanic or Latino of any race, non-Hispanic Native Hawaiians or other Pacific Islanders, and non-Hispanic American Indians or Alaska Natives received lower amounts ($7,500, $7,400, and $7,000, respectively).
The cost of higher education has been increasing, and so has the need for financial aid. According to the National Center for Education Statistics, over 85% of students received some form of financial aid in 2014, and this number increased to over 87% in the 2021-22 school year. Federal loans and institutional grants make up over half of students' total financial aid packages. Private, nonprofit four-year colleges offer the most institutional grants, with an average aid amount of $20,860.
The Free Application for Federal Student Aid (FAFSA) is the most common source of financial aid provided by the government. FAFSA provides over 13 million students with nearly $150 billion in aid. In the 2023-24 academic year, federal student loans disbursed totaled $82.776 billion, with an average federal loan award of $13,038.84. Additionally, 6.348 million college students received federal loans during that academic year.
Students can also receive financial aid through grants, which do not need to be repaid. In the 2023-24 academic year, undergraduate and graduate students received a total of $160.2 billion in grant aid, with federal grant aid totaling $44.3 billion, including $31.4 billion in Pell Grants. Federal work-study programs are another source of financial aid, providing funds directly to institutions to administer campus-based work-study jobs for students.
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Work-study programs
In the US, the Federal Work-Study Program (FWS) provides funds to institutions to administer campus-based work-study programs, covering up to 75% of student wages. The program helps ensure that college students in genuine financial need can secure part-time jobs to pay for their education. The FWS is available to undergraduate and graduate students, with jobs varying from one college to another. Students are guaranteed to receive at least the federal minimum wage, and the average annual work-study award is $1,980.
The FWS encourages community service work and jobs related to the student's course of study. Institutions offer a range of jobs, including on-campus roles in libraries or administrative offices, and off-campus positions with private employers. At least 7% of the jobs must contribute to community service, such as tutoring. Some institutions may restrict the number of hours students can work per week, and participation may depend on maintaining a certain grade point average.
To be eligible for federal student aid, including the FWS, students must be US citizens, US nationals, or permanent residents with specific documentation. Generally, international students do not qualify for the FWS. Students can indicate their interest in the FWS on their Federal Application for Student Financial Aid (FAFSA). However, not all schools participate in the FWS, and funding is limited. Even if a student receives an award, they must still find a work-study job to earn the funds.
In addition to the FWS, there are other forms of student aid available, including federal loans, grants, and scholarships. In the 2023-24 academic year, federal student loans totalled $82.776 billion, with an average award of $13,038.84. Federal grants and loans combined disbursed $114.9 billion in the same year. 56% of first-time, full-time undergraduate students received federal grants, and 6.348 million students received federal loans in 2023-24.
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Frequently asked questions
According to the National Center for Education Statistics, over 87% of students received some form of financial aid for the 2021-2022 school year.
55% of all undergraduates received federal student aid, while 23% received state aid and 28% received institutional aid. This equates to around 64% of undergraduates receiving grants, 36% taking out student loans, and 5% receiving work-study awards.
Undergraduate students received an average of $16,360 in financial aid in 2023-2024. This included $3,900 in federal loans and $11,610 in grants.
In 2022-2023, half of bachelor's degree recipients graduated with debt, with an average of $29,300 each. This is a decrease from previous years, with the average amount borrowed being $34,800 in 2012-2013 and $35,200 in 2017-2018.
The most common source of government financial aid is the Free Application for Federal Student Aid (FAFSA). FAFSA provides over 13 million students with nearly $150 billion in aid.
