Michigan State University has had a 27-percent increase in Pell-grant recipients over the past year, said Val Meyers, the university’s associate director of financial aid. About 8,900 Michigan State students will receive Pell-grant aid in 2010, a jump from the 7,000 who received the assistance during the 2008-09 school year.
The average amount of aid per student has increased, too. The average Pell-grant recipient at Michigan State received about $3,400 last year. In the coming year, the average student will get $4,300 from the Pell grant program, Meyers said.

Over the past year, major universities such as Indiana, Penn State, and Michigan State have announced they will use the federal Direct Loan Program as the source for federally backed student loans. On Indiana’s Bloomington campus, nearly 40 percent of undergraduates–or about 12,000 students–use subsidized federal loans through private lenders. Nationally, 40 percent of students who receive student aid pay for college through federal loans, according to a 2007 study released by The College Board. Sixty-one percent of graduate students who use financial aid receive federal loans.

In a survey conducted in April by Student Lending Analytics, an organization that provides data for colleges’ financial aid offices, officials at 7 percent of two-year colleges said they were planning to switch to direct federal lending, while 28 percent said they were considering the move. Overall, 5.8 percent of college officials in the survey said they were committed to the direct lending program.

Duncan said one of the administration’s primary goals is to raise the country’s college graduation rate. President Obama has said he wants the United States to produce the most college graduates in the world by 2020.

“We used to be there,” Duncan said. “We’ve flat-lined. Other folks have passed us by.”

A recent report shows how common an unfinished college career has become in the United States. About half of students in four-year colleges and universities do not get their diploma within six years, according to a report issued this month by the American Enterprise Institute on Public Policy, which used ED statistics in its analysis.

The report took statistics from 1,400 U.S. campuses and found that students leaving school without a degree pile on tens of thousands in student loan debt, including the interest charges that extend payments by years, and sometimes decades.

The country’s most competitive universities graduated almost nine out of 10 students, according to the report, while colleges deemed to be the least competitive saw 35 percent of students graduate. Still, there are highly competitive schools that have consistently low graduation rates, such as the University of Louisville, which graduates 44 percent of its students within six years.

“At a time when growing unemployment disproportionately affects workers without a degree, it is critical that this information is available and accessible so that consumers can make informed decisions,” said Kevin Carey, coauthor of the report.


Click here for audio of the eCampus News interview with Arne Duncan (mp3 audio)

American Enterprise Institute for Public Policy Research report