Fast Facts: Financial Aid | BestColleges (2024)

The overwhelming majority of college students utilize federal and non-federal financial aid to help pay for their education.

The cost of a college education is more than most students can afford out of pocket. To help with those costs, the majority of students utilize financial aid.

In this report, we break down who can benefit from student aid, how financial aid offerings have fluctuated over time, and what types of aid are available to undergraduate and graduate students.

Types of Financial Aid

Students from all backgrounds and varying situations have access to many financial aid options to help them pay for school. Below are the main types of aid available.

Scholarships

Need-based and merit-based scholarships are financial aid options awarded by the government, public organizations, private organizations, and individual academic institutions.

Scholarships do not need to be repaid and can be used to cover students' tuition and fees, books, and other costs associated with attending school.^[7]

Federal Grants

Federal grants are a form of financial aid provided by the federal government that typically do not need to be repaid. These grants can be used to pay for four-year colleges and universities, two-year institutions otherwise known as community colleges, or accredited career programs.^[8]

According to the National Center of Education Statistics (NCES), during the 2020-2021 academic year:^{Note Reference [2]}

• 51.2% of first-time, full-time undergraduate students who were awarded aid were awarded federal grants.
• The average federal grant aid awarded was $5,058.

Examples of federal grants include Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Teacher Education Assistance for College and Higher Education (TEACH) Grants, and Iraq and Afghanistan Service Grants.

As of 2021-2022, undergraduate students who received Pell Grants accounted for 47% of students who were awarded grant aid during the year. The average Pell Grant aid awarded during the period was $4,590.^{Note Reference [1]}

State, Local, and Institutional Grants

Grants are also awarded by state governments, local governments, and individual institutions. Just like federal grants, these grants typically do not need to be repaid.^{Note Reference [8]}

• In 2020-2021, 34.3% of students awarded aid were offered state/local grants.^{Note Reference [2]}
• During the same year, 52.9% of students awarded aid were offered institutional grants.^{Note Reference [2]}
• The average amount of state/local grant aid awarded was $4,253.^{Note Reference [2]}
• The average amount of institutional grant aid awarded was $12,568.^{Note Reference [2]}

Federal Work-Study

Federal Work-Study (FWS) is a government program that allows college students to work part time, on or off campus, while enrolled in school. Through Work-Study, undergraduate or graduate students earn wages that they may use at their discretion. However, their wages will be capped at the amount of their Work-Study award.^[9]

According to the most recent data from the U.S. Department of Education:^{Note Reference [5]}

• During the 2019-2020 academic year, $1.1 billion in FWS funds was allocated to participating institutions.
• In 2017-2018, 3,179 institutions across the country participated in the FWS program.
• During the same year, 612,626 students were awarded FWS funds.
• On average, students earned $1,647 in FWS funds that year.

Federal Student Loans

Unlike other forms of financial aid, federal student loans consist of money that is borrowed and must be repaid within a certain period, oftentimes with interest.^[10]

During the 2021-2022 academic year:

• 41.6% of students awarded aid were awarded federal student loans.^{Note Reference [1]}
• The average federal student loan amount awarded was $6,500.^{Note Reference [1]}

Private Student Loans

Like federal student loans, private student loans must also be repaid with interest. They differ from federal student loans in that they often require a co-signer or established credit record and do not offer loan forgiveness plans.^[11]

Financial Aid Demographics

As of the 2020-2021 academic year, 85.4% of full-time, first-year undergraduate students were awarded some type of financial aid.^{Note Reference [1]} Among the students who were offered aid:

• 51.2% were awarded federal grants.
• 52.9% were awarded institutional grants.
• 38.4% were awarded federal student loans.
• 34.3% were awarded state/local grants.

During the same academic year, the average amount of grant and scholarship aid awarded to first-time, full-time students at four-year institutions was $15,960.^{Note Reference [4]} However, financial aid awards differ across school types and demographics.

Financial Aid by Income Level

The average amount of financial aid students receive largely depends on their financial need compared to the cost of education.

• At two-year institutions, the average amount of grant and scholarship aid awarded to first-year undergraduate students in 2020-2021 was $6,440.
• The average aid awarded was highest during the same period at private, nonprofit four-year institutions for students with an income level of $30,001-$48,000.
• Average aid was lowest for students at two-year private, for-profit institutions with an income level of $110,001 or more.

Financial Aid by Race/Ethnicity

The most recently available financial aid data from NCES reveals that during the 2019-2020 academic year:^{Note Reference [6]}

• Black undergraduate students were most likely to receive any type of financial aid.
• Asian undergraduate students were least likely to receive any type of financial aid.

Financial Aid by Sex

During the 2019-2020 academic year, 74% of female undergraduate students received some type of financial aid. By comparison, 67% of male students and 66% of nonbinary students received financial aid during the same academic year.^{Note Reference [6]}

Financial Aid by Age

In 2019-2020, undergraduate students between the ages of 15 and 23 were most likely to receive some type of financial aid.^{Note Reference [6]}

• Out of 10.5 million undergraduate students between 15 and 23 years old, 74.7% were awarded and received financial aid.
• 68% of undergraduate students between 24 and 29 received financial aid.
• 67.4% of undergraduate students aged 30 or older received financial aid.

Financial Aid by Dependency Status

While some college students receive financial assistance from family or other support systems, others arrive at school independently. During the 2019-2020 academic year, 9.6 million undergraduate students were dependent, while 7.3 million were independent.^{Note Reference [6]}

• 74.2% of dependent students received at least one type of financial aid during the year.
• During the same year, 67.8% of independent students received at least one type of financial aid.

Financial Aid Over Time

Total student aid has increased exponentially over the past 50 years. Between 1970 and 2022, total financial aid, including non-federal student loans, rose by more than 900%.^{Note Reference [3]}

• Total aid peaked during the 2010-2011 academic year at $303.9 billion.
• Current estimates of total student aid during the 2022-2023 academic year are the lowest they have been in 10 years at $255.4 billion.

The average aid awarded to students has also increased over time. Between 2001 and 2022, the total average aid for undergraduate students rose by nearly 55%. For graduate students, average aid increased by about 40%.^{Note Reference [3]}

• Total average aid for undergraduates peaked in 2010-2011 at $16,840 per student.
• For graduate students, the total average aid was at its highest during the same year at $31,110.

Average grant aid for undergraduates has seen the biggest increase over the last 20 years, while average federal loans for graduate students increased the most since 2001.^{Note Reference [2]}

• Between 2001 and 2023, the average grant aid for undergraduates increased from $5,190 to $10,677.
• During the same period, average federal loans for graduate students increased from $11,930 to $17,489.

Frequently Asked Questions About Financial Aid