FIGURE 3-4 Average annual unmet need of high school graduates, by family income and type of institution.

SOURCE: Advisory Committee on Student Financial Assistance, 2002.

Department of Education, 1999). Between 1992 and 1999, average annual borrowing by low-income students with high unmet need increased from $1,812 to $2,982 at public 4-year colleges (Advisory Committee on Student Financial Assistance, 2002). At private colleges borrowing increased from $2,935 to $4,130 (Advisory Committee on Student Financial Assistance, 2002). Thus, a 4-year baccalaureate degree can result in over $16,000 of debt for low-income students.

The impact of high unmet need can be considerable on low-income students, even those who are academically prepared for the challenges of higher education. Low-income students with high unmet need are significantly less likely than high-income students with low unmet need to expect to finish college; plan to attend a 4-year college after graduating from high school; take entrance exams; and apply, enroll, and persist to degree completion (Figure 3-5) (Advisory Committee on Student Financial Assistance, 2002). Students who have sufficient funds for college enjoy enhanced academic performance and social integration on campus and are more likely to persist to graduation (Nora and Cabrera, 1996).

In an investigation of the influence of race and gender on the awarding of financial aid, Heller (2000), using data from the National Postsecondary Student Aid Studies, found that while there were variations in financial aid by geographic region and type of institution, in general, African American students were more likely to receive nonneed grants (based on merit or other circumstance not related to financial need, such as academic, artistic, or athletic merit), particularly those students attending public institutions. Hispanic students were less likely to receive nonneed grants. The author

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