New national data shows increase in grants

The data saw a 4.2 percentage point increase in students who received grants.

by Max Chao

Newly released national data suggests a recent trend of students increasingly receiving grants and fewer students taking out loans. 

The study, curated by the National Center for Education Statistics and released every four years, reflects the years-long trend of students increasingly utilizing federal grants.

According to the study, the number of undergraduate students receiving grants in 2016 increased 4.2 percentage points compared to 2012. This is a 12.6 percentage point increase from 2004. 

Student aid distribution at the University of Minnesota-Twin Cities reflects this trend. According to the Office of Institutional Research, from 2013 to 2017 the amount of gift aid disbursed to undergrad students increased by $19.4 million, and the amount of loan money disbursed decreased by $7.7 million.

As of 2017, 71 percent of University students receive gift aid, loans or work study financial assistance.

While the University has seen a decrease in student borrowing in recent years, they aren’t sure what the cause is, said Tina Falkner, director of the Office of Student Finance at the University.

“We do see that borrowing is down, which is always good,” she said, but added that the University doesn’t have data to support that students are replacing loans with grants.

Increased state investment in grants under Gov. Mark Dayton and inflation adjustments for federal Pell grants under the Obama administration contributed to the rising grant aid in Minnesota, said Meredith Fergus, a financial aid analyst for the Minnesota Office of Higher Education.

“The trend definitely shows the importance of ensuring adequate investment by states, as well as Congress, in our student aid programs,” she said.

Fergus said the student aid landscape in Minnesota is dependent on investment decisions from the White House. 

“President Trump hasn’t proposed an increase to the federal Pell grant program,” she said. “We’re worried at the federal level.”

Loans, along with grants and overall student aid, saw a steady increase in usage nationally over an eight-year period, according to data going back to 2004. In the most recent data, however, loan distribution saw a 3.3 percentage point decrease. 

Fergus said this dip in borrowing is in part due to the increased investment in grants and steady tuition rates. 

Falkner said the decrease in borrowing can likely be somewhat attributed to increased education and awareness efforts by universities about the long-term impact of loans.

“Most institutions now are really trying to do some financial literacy education about borrowing and borrowing wisely,” she said.