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This report discusses the policy implications of the increasing role played by grants provided by colleges and universities as a source of financial aid for students and their families. It underscores the direct and indirect connections between changes in federal and state policy and institutions' aid programs, focusing on the effects of the Higher Education Act Amendments of 1992 (including changes in need analysis and the advent of unsubsidized Stafford loans), slowed funding of federal grant programs, and increases in merit-based aid at the federal and state level. The report notes that between 1990 and 1996, the amount of scholarship and grant aid provided by public and private four-year institutions jumped from $4.7 billion to $8 billion. Among public colleges and universities, the selective and highly selective institutions provided the largest increases in aid. For private colleges and universities, however, institutional grant aid increased by the largest amounts at the less selective institutions. The report notes that aid increases at public and private institutions have been much greater than increases in spending for instruction, student services, maintenance of school facilities, and other general and educational expenditures. (Contains 23 references.) (MDM)

Descriptors: Colleges, Educational Finance, Educational Policy, Educational Trends, Federal Aid, Federal Legislation, Federal Programs, Grants, Higher Education, Institutional Role, Merit Scholarships, Need Analysis (Student Financial Aid), Private Colleges, Public Colleges, Public Policy, Scholarships, Selective Colleges, State Aid, State Legislation, Student Financial Aid, Universities

Sallie Mae, 11600 Sallie Mae Drive, Reston, VA 20193; Tel: 703-810-7158; Web site: .

Autor: Reindl, Travis; Redd, Kenneth


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