States Increase Financial Aid Funding for Student Loans and Grants

Student Loan Girl — Mon, 23 Jun 2008 21:29:00 GMT

State spending on financial aid for undergraduates increased 6 percent or by a total of $9.3 billion in 2006-07 academic year, after growth slowed to 3.4 percent during the 2005–06 academic year, according to a recent report by the National Association of State Student Grant and Aid Programs.

States spent the majority of their financial-aid funds, or $5.29 billion, on need-based grants and student loans for undergraduates this year.

However, state spending on non-need-based aid for undergraduate students has eclipsed the amount of money states have devoted to need-based aid over the past decade, increasing 5.6 percent during 2006–07 to $2.08 billion, The Chronicle of Higher Education reports (“States Spend More on Student Aid,” June 27, 2008).

Funding for student loans received the biggest jump in state spending this year, by nearly 29 percent or $653 million, following a 17-percent increase in spending between the 2004–05 and 2005–06 academic years, according to NASSGAP data.

The report listed South Carolina, Indiana, Georgia, Kentucky, and West Virginia as the top spenders in grant-aid, per capita, for their 18-to-24-year-old population in the 2006-07 academic year.

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States Increase Financial Aid Funding for Student Loans and Grants