Student Aid Increased During Recession

The overall economy is finally showing signs of significant improvement this year, but new findings show that student aid has been increasing despite the recession.

States increased their amount of student financial aid by almost 2 percent during the 2011 fiscal year, according to the newly released annual survey for the 2011-2012 academic year by the National Association of State Student Grant and Aid Programs.

During that time, states awarded a total of $11.1 billion, an increase of 1.8% in constant dollar terms from the previous school year. But perhaps more significant in terms of how funds were used to help those in need, $6.8 billion of that number was allotted based on financial need, representing a 6% increase from the previous school year. Funding for non-need based grants declined by 9% over the year.

The findings show that states recognize the importance of education, particularly in difficult economic times for those with low family incomes. Increasing the amount of need-based aid is a way of making state’s education dollars go further, according to a statement by NASSGA president J. Ritchie Morrow.

Stretching those dollars to students in need was not easy at the time with state spending heavily reliant on federal stimulus money. But providing need-based grants to students is extremely important, particularly as the number of loans — and the amount of those loans — were on the rise.

On the federal side, $146 billion was spent on student financial aid in 2011, according to the U.S. Department of Education’s “The Condition of Education 2013” report. And though that number includes student loans, grants and work study, the vast majority — $108.6 billion — was issued as loans.

Though the amount of loans issued during 2011 is significantly higher than it was in 2000, that is due in large part to the significantly increased postsecondary enrollment. The number of total students attending postsecondary institutions increased from 13.2 million in 2000 to 17.6 million in 2009.

With more students attending college and more federal loans being issued, the increased need-based student aid provided by the state shows appropriate focus on education today.

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