The percentage of full-time undergraduates receiving institutional aid and the average amount awarded increased at both public and private not-for-profit 4-year institutions during the 1990s.

Many colleges and universities use their own resources to provide aid to undergraduates to achieve one or more of the following policy goals: promoting access for low-income students, attracting meritorious students, or increasing enrollment (Redd 2000). Institutional aid is awarded in the form of grants, fellowships, assistantships, loans, and institution-sponsored work-study, but almost all is grant aid. Institutions can award aid to students on the basis of financial need, merit (academic, athletic, or other), or a combination of need and merit.¹ The institutional aid described here includes all three types.

The use of institutional aid at 4-year institutions has been increasing. In 1992–93, some 17 percent of full-time undergraduates at public institutions and 47 percent of those at private not-for-profit institutions received institutional aid. By 1999–2000, the respective proportions had increased to 23 and 58 percent. During this period, the average award (adjusted for inflation) increased from $2,200 to $2,700 at public institutions and from $5,900 to $7,000 at private not-for-profit institutions.

Students in the highest income quarter, in particular, have benefited. Between 1995–96 and 1999–2000, the proportion of such students receiving institutional aid increased from 13 to 18 percent at public institutions and from 41 to 51 percent at private not-for-profit institutions. Middle-income students at public institutions also benefited during this period, with an increase from 20 to 23 percent. The apparent changes for low-income students were not statistically significant.

The percentage of students awarded any aid for which merit was the only criterion increased between 1995–96 and 1999–2000 from 7 to 10 percent at public institutions and from 21 to 29 percent at private not-for-profit institutions (see table 37-1).² At private not-for-profit institutions, students in the middle-income quarters were the most likely income group to receive merit-based aid in 1992–93 and 1995–96, but no statistically significant difference was detected between students in the middle- and highest income quarters in 1999–2000. Students in both these income groups were more likely than those in the lowest income quarter to receive merit-based aid. In contrast, no statistically significant income-related differences were detected in the percentage of students receiving merit-based grant aid at public institutions in any of the survey years.

¹It is difficult to distinguish between need- and non-need-based aid because non-need-based aid is often awarded to students with need and need-based aid is often rationed using criteria related to merit. (back to text)

²Merit aid is included in total aid. The averages are computed only for the recipients, so the average amount of merit aid cannot be subtracted from the average amount of total aid to calculate the average amount of aid based on need or need plus merit. (back to text)