The views of this article are the perspective of the author and may not be reflective of Confessions of the Professions.
Looking Back At Financial Aid
The idea that only rich people get to go to college used to be a common thought and sadly, it was not unfounded in the beginning. However, as far back as 1643, when Lady Anne Radcliffe Mowlson donated 100 pounds sterling to Harvard, there have been efforts made in order to help bright, motivated students without the funds to attend college. While other efforts were made early on, it wasn’t until around 1938 when the College Board begins administering the SAT in order to present students with merit-based scholarships, that the financial aid efforts began to increase in frequency and amounts.
By 1972, the Pell Grant was introduced (Basic Educational Opportunity Grants) and by 1980 2.7 million students had been awarded a Pell Grant. Pell Grants remain a strong factor in helping students get aid for college. There have been many other financial aid efforts for students over the years. These other forms of financial aid are there to assist students, offered as loans, and must be paid back with interest. There are hundreds of scholarships, not a part of the official government financial aid program, that students can apply for in order to receive additional money. Within the last decade, the government sought to make college more affordable to everyone and political figures have encouraged more people who normally would not consider going to college, as they couldn’t afford it, to go, whether they could afford it or not, they would be given the help to do so.
Enrollment rates increased by 18 percent from 1993 and 2003 and again by 20 percent from 16.9 million to 20.5 million students by 2016. Financial aid has especially helped the African American, Hispanic, Asian, and Native American communities to have more confidence in attending colleges. More females than males are currently taking advantage of the additional financial aid assistance and attending college universities. The largest age group currently attending college is between 18-24 years old. Average prices for tuition and other fees at a public institution were around $16,188, while private nonprofit institutions were $30,643, and private for-profit institutions were $13,971. Today, the total financial aid for students totals $239 billion.
Take a look at this infographic to learn and understand the history of financial aid.
Infographic submitted by Trisha Baxter, article summary by Matthew Gates and Trisha Baxter.
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The History of Financial Aid
1643: Scholarships in the U.S. begin as philanthropy by the rich for the poor, like Lady Anne Radcliffe Mowlson’s donation of £100 to Harvard to fund the education of disadvantaged students. (1)
1843: Harvard establishes its General Beneficiary Fund, a lending agency to make zero-interest loans to students who could not otherwise afford to attend. (1)
1870: There are 63,000 students enrolled in institutions of higher education in the U.S. (1)
1938: College Board begins administering the SAT to identify students for merit-based scholarships.(1)
1940: There are 500,000 students enrolled in institutions of higher education in the U.S. (1)
1944: The Servicemen’s Readjustment Act, better known as the GI Bill, is enacted to, in part, cover the tuition and living expenses of World War II veterans attending college. (2)
1945: There are 1.7 million students enrolled in institutions of higher education in the U.S. (1)
1954: College Board opens its College Scholarship Service to connect low-income and minority students with funding from universities. (1)
1958: The Soviet launch of Sputnik inspires Congress to establish National Defense Student Loans, later renamed Perkins Loans, which offer university students low-interest loans with debt cancellation for service as teachers after graduation. (2)
1960: There are 4 million students enrolled in institutions of higher education in the U.S. (1)
1965: The Higher Education Act introduces the framework for many components of financial aid still in use today, like PLUS (Parent Loan for Undergraduate Students), Guaranteed Student Loans (government-backed private loans) and College Work-Study. (2)
1972: Basic Educational Opportunity Grants, now called Pell Grants, are introduced, awarding students up to $1,400. (2)
1978: The Middle Income Student Assistance Act increases the Guaranteed Student Loan limit to $2,500 per year. (3)
1980: 2.7 million students receive Pell Grants. (1)
1989: Guaranteed Student Loans, now called Stafford Loans, make up almost 27% of federal student loans. (1)
1992: PLUS limits are uncapped, allowing parents to borrow up to the total cost of attendance minus any other funds their student received, and Unsubsidized Loans become available. (2)
1993: The Student Loan Reform Act aims to transfer at least 60% of Stafford Loans to Direct Student Loans (government-issued loans) over the next 5 years and peg monthly repayments to a borrower’s income for 25 years. (2)
1995: Total annual student financial aid issued grows to $47 billion. (4)
2005: Total annual student financial aid issued grows to $146 billion. (4)
2007: The College Cost Reduction and Access Act establishes a program to forgive debt after 10 years of full-time employment in education, emergency personnel and law enforcement services, military service and government positions. (1)
2008: Stafford Loans make up almost 46% of federal student loans. (1)
2010: The Student Aid and Fiscal Responsibility Act is signed into law, eliminating the lending of Stafford Loans in favor of Direct Loans.(5)
2015: Total annual student financial aid issued grows to $239 billion. (4)