The financial aid industry has been rocked by an uptick in reports that some of the country’s top private schools are offering discounts to students who take out loans.
A new study by the American Council on Education found that in the first quarter of 2017, the percentage of federal Pell grants awarded to students with student loan debt rose by 5.6 percent, to $1,000 from $878.
The report says the trend may have been even more pronounced in the last two quarters of 2017.
“It’s just a real troubling trend,” said Alex DeWitt, a spokesman for the Council on Higher Education, which is affiliated with the American Federation of Teachers.
“These schools are going to continue to make this kind of effort to try to get these students out of school and get them on their feet.”
The rise in tuition hikes in the wake of the financial crisis has forced many families to borrow money to pay the bills and has left many families struggling to pay their mortgage, rent, or other bills.
The cost of tuition has risen for students from the bottom to the top of the income ladder, which has caused some students to leave school with more debt than their parents did, the Council says.
Students can be eligible for loans in five different categories.
Students with a student loan are considered low income.
Those with loans from the federal government are considered high income.
The Council found that the average amount students took out on a student loans loan in the second quarter of this year was $6,723, a 5.7 percent increase from the same quarter a year earlier.
The average amount of debt per student increased from $11,065 in the same period last year to $13,853 this year.
The report also found that Pell grants are the largest single source of funding for higher education for students who need help paying for school.
The median amount students received in Pell grants in the third quarter of last year was almost $12,000, up from $10,000 the year before.
The average amount Pell grants were awarded to a student in the fourth quarter of 2015 was $8,542, up 4.5 percent from the year earlier, according to the Council.
Students also received about $9,000 more in Pell grant awards in the final quarter of the year than they did the year prior.
In a statement, the U.S. Department of Education said the administration is taking action to prevent these types of predatory practices from occurring in the future.
“These findings underscore the need for schools to protect students’ privacy, privacy and financial security while working to improve the financial aid process,” the department said.
“The Department is also committed to providing student financial aid to students in high-need situations and to ensuring that they have access to quality financial aid and help they need.”