Year in Review: Ups and Downs for Student Financial Aid in 2011
January 05, 2012
2011 was an eventful year for student financial aid, student loans and scholarships. This article summarizes the major events, positive and negative, for student aid in 2011. It also provides a few highlights of developments that are anticipated for 2012.
The Department of Defense and Full-Year Continuing Appropriations Act, 2011 (P.L. 112-10, April 15, 2011) ended the year-round Pell Grant program effective with the 2011-12 award year, cutting about $8 billion a year from the Pell Grant program. The year-round Pell Grant program allowed students enrolled in accelerated degree programs to receive two Pell Grants in a single year. (2010-11 was also the last year of the Academic Competitiveness Grant and National SMART Grant programs, which were add-ons to the Pell Grant program for students who majored in science, technology, engineering and mathematics.)
The number of private scholarships began increasing again, after several years of little or no growth. The Buick Achievers Scholarship is the largest new private scholarship, awarding 1,100 renewable scholarships a year of up to $25,000 each. Other major new scholarship programs include the Intel AppUp Developer Challenge Contest, the Dr. Pepper Million Dollar Tuition Giveaway-Cotton Bowl Contest, the GE-Reagan Foundation Scholarship and the Foot Locker Scholar Athlete Scholarship.
The number of applicants filing the Free Application for Federal Student Aid (FAFSA) increased to 21.1 million in 2010-11 from 19.5 million in 2009-10 and 16.4 million in 2008-09. That’s an increase of 4.7 million (29%) in just two years. The growth in the number of applications has continued in 2011-12, with 18.8 million FAFSAs filed in the first 9 months, up from 17.8 million in the first 9 months of 2010-11 and 16.0 million in the first 9 months of 2009-11.
The first full year under 100% Direct Lending passed without any major problems from a student perspective. PLUS loan approval rates increased, as previously predicted, yielding a 15% increase in the number of Parent PLUS loan recipients, while Stafford loan disbursements remained unchanged.
Two thirds of Bachelor’s degree recipients graduated with federal and private student loan debt, with the average student loan debt estimated at $27,200. If the parent loan debt is included, the average total education debt at graduation is estimated at $34,400 for Bachelor’s degree recipients. Average student loan debt was $22,800 for Bachelor’s degree recipients at public colleges, $33,400 at non-profit colleges and $38,900 at for-profit colleges. One third of undergraduate students are graduating with more than $20,000 in federal student loan debt, making them eligible for 20-year or longer repayment terms. This means they may still be repaying their own student loans when their children enroll in college.
The 2011 College Decision Impact Survey showed that high school seniors and their families are focusing more on bottom line college costs and the return on investment when choosing a college. High school seniors were more likely to switch preference from non-profit colleges to public colleges (24%) than from public to non-profit (9%). 37.3% of high school seniors did not enroll at their first-choice college, with a third (31.2%) saying that they could not afford their first choice and a tenth (11.4%) saying that they got a better aid offer elsewhere. Among the students who switched preferences from public to non-profit colleges, a third (33.0%) appealed for more aid and almost half (44.7%) got an increase in the financial aid offer. About one out of every six high school seniors had at least one parent lose a job in the last year.
Need money to pay for college?
Every semester, Fastweb helps thousands of students pay for school by matching them to scholarships, grants and awards for which they actually qualify. Sign up today to get started. You'll find scholarships like the $2,000 "No Essay" Scholarship from Niche, a scholarship open to all U.S. students and those planning on enrolling within 12 months, and high value scholarships like Opinion Outpost $10,000 Quarterly Prize.