Stone discovered the limitations of her Pell grant three semesters shy of graduation. Between her time at Pace University in New York, community college and taking courses over the summer, Stone used up all of the federal need-based aid she could receive. And that meant she had to borrow.
Using data from the Education Department and the Federal Reserve’s 2013 Survey of Consumer Finances, Huelsman found that graduates with Pell grants borrow at far higher rates and higher amounts than their middle- and upper-income counterparts at two- and four-year institutions. That is regardless of whether they attend public or private colleges.
The trend of borrowing among those who can least afford it signals the erosion of decades of federal policy instituted in the 1960s to give needy students access to higher education. It’s striking in light of another study from the New America Foundation that found that 68 percent of public colleges provide scholarships to students who don’t need financial aid.