Once a student’s financial need is established, a financial aid officer develops an aid package to meet as much of this need as possible. Aid packages consist mainly of grants, loans, and work-study.¹¹ The particular combinations of aid awarded vary systematically with family income, reflecting varying eligibility for need-based aid, and by type of institution, reflecting differences in prices of attending and aid resources. As income and price increase, so does reliance on loans generally.

Students do not always receive sufficient aid to meet their entire need for several reasons. First, the funds available may not be sufficient to cover all students’ needs. Second, students may decline to take out some or all of the loans for which they are eligible and find other ways to cover their expenses such as working more, spending less, or contributing more than the amounts calculated in the expected family contribution formula. Finally, students who are eligible may not apply for aid or provide all the documentation required to complete the application process.

• The percentages of students receiving financial aid and the average amounts received by aided students have both increased for all income groups and at all types of institutions.

In 1990, 54 percent of all full-time dependent undergraduates received some type of financial aid (table 3). By 2000, 71 percent received aid. Among aid recipients, the average amount received (adjusted for inflation) grew as well (from $6,200 to $8,700), as did the percentage of the price of attending covered by financial aid (from 46 to 53 percent). This pattern of growth was evident for students in all income groups and at all types of institutions. It reflects the increased eligibility for aid, as described earlier, and the increased availability of both grants and loans, as described below.

¹¹Qualified students may receive certain other types of aid, such as ROTC or veterans’ benefits for dependents and survivors. (back to text)