As price of college rises, so does federal aid

WASHINGTON (AP) — With college costs continuing to rise, more students are receiving federal financial aid, though state and institutional aid remains largely flat

Data released Tuesday by the National Center for Education Statistics, a branch of the U.S. Department of Education, shows 71 percent of all undergraduate students received some type of financial aid in the 2011-12 school year, up from 66 percent four years earlier.

Forty-two percent of students received federal grants, up from 28 percent, and 40 percent received federal loans, an increase of 5 percentage points.

Meanwhile, 15 percent received state grants and 20 percent received a grant from the college or university they attend — figures that have remained essentially unchanged since the 2007-08 school year.

Among full-time, dependent students, access to state grants actually declined, from 29 percent to 26 percent.

“I think these last four years were very tough for states, and certainly we weren’t surprised,” said Jack Buckley, commissioner of the NCES.

The data comes just weeks after President Barack Obama signed a law restoring lower interest rates for millions of college students. The law links student loan interest rates to the financial markets, meaning rates will be lower this fall because the government can borrow money cheaply at this time. However, student loans could become more costly if the economy continues to improve, and interest rates increase.

The law covers an estimated 18 million loans totaling some $106 billion.

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