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Harvard Loan Program Establishes Basis of Current Federal Government Student Aid Program.
Harvard University created the first process for student financial aid in the nation. The institution established a private student lending system to issue zero-interest loans to students to permit them to attend college. Soon, other institutions followed suit to create student loan programs. The Federal Government eventually modeled its programs after this first one from Harvard (Fuller, 2014). -
Period of Growth for Higher Education
From 1870 to 1945, higher education took on new dimensions as it expanded facilities, added professional courses, became accredited, and added financial aid. In 1938, the College Board began the Scholastic Aptitude Test (SAT) to identify top students for scholarships (Lemann, 2000). Fuller (2014) noted that "with the development of admissions and scholarship examinations, measuring a student's abilities and merits became an alternative to need-based methods of awarding financial aid" (p. 47). -
Servicemen's Readjustment Act, 1944-GI Bill (30 U.S.C.)
The GI Bill provided assistance for veterans to attend college. It set up the foundation of financial support and entitlement in higher education. "It transformed American higher education forever" (Fuller, 2014). In the next 10 years, enrollment doubled from 1.15 million to 2.45 million students (Synder, 1993). -
GI Bill (30 U.S.C.) Sets Precedent in Student Financial Aid
The effects of the GI Bill fundamentally transformed all areas of higher education (Cohen & Kisker, 2009). It set up the guaranteed loan program, supported the student rather than the institution, associated institutional quality with aid, enabled more social classes to attend, and established scholarship and admission exams (Fuller, 2014). -
Veterans' Readjustment Assistance Act of 1952 (38 U.S.C.) Extends Benefits and Sets Accreditation
Amid a controversy of overcharging students on federal aid and with the charge institutions increased costs because of its availability, this act had restrictions. Veterans were only eligibility for benefits if enrolling in institutions which were accredited by an agency approved by the U.S. Sec. of Education (Thelin, 2011). This act set the current procedure of regulating federal aid through an institution's self-governing and put the government's oversight at a distance (Fuller, 2014). -
FAFSA Begins with Opening of College Scholarship Service
The College Board College Scholarship Service widens the coverage of financial assistance to include minority and low income students (Fuller, 2014). At this time, those needing financial assistance were matched to colleges that had that availability. The Free Application for Federal Student Aid (FAFSA) had its beginnings in these methods. -
Sputnik Launches New Emphasis on Financial Aid
Congress finally broke free of all the arguments for and against supplying further financial assistance to students when the Soviet Union put the world's first artificial satellite, Sputnik, into space in 1957. Amid the tense political relationship between the Soviet Union and the U.S. of the Cold War, national security came to the forefront and Congress footed the bill for limited student assistance through the National Defense Education Act of 1958 (Gladieux, 1995). -
Government Makes Direct Loans to Students Through Perkins Loan Program
The National Defense Education Act of 1958 created what became the Perkins Loan Program for civilians as well as military. The Federal government created these loans itself and the aid went directly to the student. It provided for deferred repayment until after graduation with a 10-year term and 3% interest (Fuller, 20140). This process continues today except with a different term and with interest rates at 3.76%. -
NDEA of 1958 Provides New Student Aid
This Act provided for low-interest loans with debt cancellation for those who entered the teaching field; established graduate fellowships in the areas of math, science, engineering and other strategic fields. Need-based grants and outright scholarships were still in the future (Gladieux, 1995). Enrollment grew to four million college-age students (Synder, 1993). The agenda-based philosophy of assistance emerged with a focus on economics and national security (Fuller, 2014). -
The Higher Education Act of 1965 (20 U.S.C) Most Important Policy in Contemporary Times
When President Lyndon Johnson signed the HEA, he put into motion the most far-reaching act for contemporary higher education and financial aid for students in America. A part of his War on Poverty, it promoted a philosophy of higher education being a national issue (Fuller, 2014). Title IV of this act set up the guidelines for the financial assistance to students and for the U.S. government guaranteeing the student loans with private lenders if a loan went into default (Fuller, 2014). -
The HEA in Subsequent Years
Over the next 30 years, the HEA remained as the basis of the student financial aid. Various re-authorization acts expanded and redefined the policies under Presidents Regan, Bush, and Clinton. New policies included Stafford Loans which paid interest for students attending college; grants for low-income; the PELL Grant; tuition tax credits, increased borrowing limits; offering unsubsidized loans to students with no need; college savings plans; and lending directly to students (Fuller, 2014). -
Congress Extends HEA (20 U.S.C.) Through 2016.
Congress has extended the HEA (20 U.S.C.) through the end of this year while it examines a number of specific issues. The House passed five different bills, and now it is up to the Senate. Issues that will be debated include affordability and college costs, consumer information, retention and graduation rates, loan programs, and federal policy. The HEA has been updated and re-authorized eight separate times since its inception in 1965 (American Council on Education, 2016). -
Current Topics of Debate in Student Financial Aid
Much interest on student financial aid today revolves around the massive amount of student debt incurred by graduates, the fierce competition they face in the job market, and the sense of entitlement (Fuller, 2014). Earlier methods of student sponsorship have been replaced with government controlled financial aid. Today politics and society both play a major role in financial aid programs. Universities must resolve these issues to continue to serve its students. -
References Continued
Free Application for Federal Student Aid (FAFSA). (2016).
Retrieved Sept. 13, 2016, from www.fafsa.ed.gov.
Fuller, M. (2014). A history of financial aid to student. Journal of
Student Financial Aid. 44(1).
Gladieux, L. (1995). Federal student aid policy: A history and an
assessment. Retrieved Sept. 13, 2016, from
www2.ed.gov/offices.
Higher Education Act of 1965. 20 U.S. C.: Education. Retrieved
Sept. 13, 2016, from www.ncher.us. -
References
American Council on Education. (2016). Higher Education Act.
Retrieved Sept. 18, 2016, from www.acenet.edu.
Cohen, A. & Kisker, C. (2009). The shaping of American Higher
education: Emergence and growth of the contemporary
system. San Francisco, CA: Jossey Bass.
College Board. (2012). CSS/Financial aid profile. Retrieved
Sept. 13, 2016, from www.professionalscollege.com. -
References Continued
Synder, T. (1993). 120 years of American education: A
statistical portrait. Washington, D.C.: National Center for
Education Statics.
Servicemen’s Readjustment Act of 1944. 30 U.S.C. 268. (1944).
Retrieved Sept. 13, 2016, from
http://research.archives.gov/description/299854.
Thelin, J. (2011). A history of American higher education.
Baltimore, MD: The Johns Hopkins University Press. -
References Continued
The Veterans’ Readjustment Assistance Act of 1952. 38 U.S.C. §
3695. (1952). Retrieved Sept. 13, 2016, from www.va.gov.
