University Park, Pa. -- As college costs rise nationwide in the face of shrinking state support for public higher education, Penn State is supporting more students in their quest to pay for college and continues to seek ways to stem the growth of post-graduate debt.
A report Friday (Nov. 4) to the University's Board of Trustees noted that in the last decade, the number of students receiving some type of aid package from Penn State has increased from 68 percent to 80 percent of the undergraduate student body -- a total of 50,862 students. The dollar amount of that aid distributed within just the last three years grew by 33 percent, from approximately $405 million in 2001-02 to $538 million in the last academic year, with most of that increase in the form of federal student and parent loans.
Over the past several years the University has played a significant role in trying to steady the level of debt students face after they graduate. The average debt of graduating seniors in 2004-05 was $22,420 -- an increase of $1,920, or 9.4 percent, over the debt incurred by students in the previous year, while that rate of increase over the past five years was 25.3 percent.
"There is still much to be done to help reduce the gap between today's costs and the available financial assistance that our students need," said Anna Griswold, assistant vice president for student aid.
Scholarships are an integral source of funding reaching 21 percent of all Penn State undergraduate students, thanks in large part to considerable support from the University's recent $1.37 billion fund-raising campaign and the current Trustee Scholarship Program, which aims to raise $100 million for the sole purpose of scholarship endowment that would support between 4,000 and 6,000 more financially needy and deserving students. To date, the program has raised $20.7 million, resulting in the creation of 221 active scholarship endowments.
This ongoing endeavor has resulted in 3,511 awards since the program's inception three years ago.
In 2004-05, a total of 13,339 undergraduates were assisted by University scholarships, compared to 5,565 in 1994-95 -- a 140-percent increase. The amount of money distributed in University scholarships over that 10-year period has risen from $11.1 million to $41.4 million, an increase of 204 percent.
"Our greatest challenge as we seek ways to keep Penn State affordable for low and middle income students is the decline in the purchasing power for the Federal Pell Grant and the PHEAA State Grant," noted Griswold. "The convergence of rapidly increasing costs and relatively flat funding in the federal and state grant programs is creating an increase in unmet need for our students."
During the 2004-05 academic year, 13 percent of the types of total aid offered by Penn State came in the form of scholarships, which provide the greatest means for minimizing educational debt. Regarding the sources of those funds, 15 percent came from external sources that students brought in from outside the University, and 71 percent came from federal and state sources, with the primary source of funding for Penn State students in the form of loans. Of all types of financial aid, 63 percent given to students occurred in the form of loans as a means to pay for their education.
The pool of money available to students through loan packages that can typically be repaid over long terms at low interest rates continues to increase dramatically. Since 1994-95, the amount of federal student loans received by Penn State students has increased from $108.6 million to $185.3 million. Parent loans have risen at an even sharper rate in the last 10 years, from $15.9 million to $83 million in 2004-05. Finally, more private educational loans are available than ever before, totaling $65.3 million last year -- up from $6.7 million only five years ago.