The University is experiencing a rise in the amount of financialaid monies awarded to students as the amount of federal grant aiddeclines.
A National Center for Education Statistics analysis titled the”Condition of Education 2004″ was released earlier this month andreported the growing trend of more full-time college studentsborrowing federal money for college.
Federal financial aid consists of Pell Grants, PLUS Loans, andStafford Loans.
PLUS Loans allow parents to borrow money to finance theirchild’s education.
Stafford Loans are funds available to students at low interestrates. There are two types of Stafford Loans — subsidized andunsubsidized.
Kim Dudley, associate director of the Office of Student Aid andScholarships, said she has seen a large number of Universitystudents applying for financial aid.
Dudley said the reason more students are applying for aid isthat the interest rates are low.
“Interest rates are the lowest they have ever been at thestudent loan program,” she said.
According to a Department of Education Web site, interests ratesfor Stafford Loans and Plus Loans are 2.77% and 4.17%,respectively. These rates are the lowest in 35 years.
More than 26,000 University students applied to receive federalaid for the 2003-04 academic year, she said.
Dudley said the Office of Student Aid and Scholarships alreadyhas received more than 24,000 applications before the start of thefall semester.
According to the NCES analysis, the number of students from highincome families applying for federal aid has increased.
Dudley said she thinks the report’s analysis about higher-incomestudents borrowing is logical, because University numbers also showa rise in the amount of money awarded for non-need based loans.
Federal Stafford Subsidized Loans are based on financial needand the government pays the interests while the recipients are inschool.
Federal Unsubsidized Loans and Plus Loans are guaranteedstudents loans, Dudley said.
Higher education institutions determine whether a student iseligible to receive an Unsubsidized Loan. The student isresponsible for paying any interest incurred while he is enrolledin a university.
According to the Associated Press, the need for federalassistance is in response to the higher tuition cost and studentliving expenses.
Whatever the need for aid may be, Dudley said the University hasawarded more money for the 2003-04 than it did the previousyear.
She said the total amount of money dispersed for loans hasincreased throughout the past academic year.
The University awarded $7.7 million to recipients of the federalPLUS Loan in 2002-03, Dudley said. $9.7 million was awarded for2003-04.
She said a total of $37.7 million of Stafford Subsidized Loanfunds were awarded to recipients for 2003-04 — a $1.4 millionincrease since the previous year.
The total amount of Unsubsidized Stafford Loans awarded rose to$33.6 million, Dudley said.
While the total amount of federal student loans awards haveincreased, the number of students applying for grants has decreaseddespite its availability, the analysis said.
Dudley said the University awarded $13.9 million dollars in PellGrant money for the 2003-04 academic year — a decrease from the$14.2 million awarded for the 2002-03 academic year.
Pell Grant funds do not have to be paid back to thegovernment.