Higher Education: Grants Effective at Increasing Minorities' Chances of
Graduating (Testimony, 05/17/94, GAO/T-HEHS-94-168).

As college tuition has soared during the past 15 years, grant aid to
students has not kept pace, and loans accounted for an ever-increasing
proportion of student aid.  Although the trend in federal funding for
higher education is toward fewer grants and more loans, grant aid is
more likely to improve graduation rates for some minorities.  The shift
in federal funding from grants to loans may save federal budget dollars
initially but could cost the economy in the long run.  Both grants and
loans reduce the current outlay required of the student and his or her
family.  However, because of principal and interest repayment,
loans--unlike grants--do not reduce the net cost of education to the
student over time. Although the federal cost of a grant exceeds that of
a loan or an equivalent amount, grants may be more cost-effective if
they better encourage students to finish their college education and, as
a result, boost their earnings potential.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-HEHS-94-168
     TITLE:  Higher Education: Grants Effective at Increasing 
             Minorities' Chances of Graduating
      DATE:  05/17/94
   SUBJECT:  Minorities
             Grant administration
             Colleges/universities
             Minority education
             Student financial aid
             Educational grants
             Student loans
             Higher education
             Aid for education
             Attrition rates
IDENTIFIER:  Pell Grant
             
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