Financial Aid Policy Summary

With the ever-increasing tuition and ever-tighten federal student aid, the number of students relying on student loan to fund a college education hits a historical peak. According to a survey conducted by an independent and nonprofit organization, two-thirds of college seniors graduated with loans in 2010, and each of them carried an average of $25,250 in debt. (Reed et. al., par. 2). My research question will focus on the profound effect of education debt on American college graduates’ lives, and my thesis statement will concentrate on the view that the education policymakers should improve financial aid programs and minimize the risks and adverse consequences of student loan borrowing.

As a graduate student at the University of Missouri-St. Louis, I had the opportunity to enhance my understanding of higher education through my coursework, and involvement with on campus organizations. While a graduate student, I also worked in both the student affairs and academic advising department and, I was able to conduct research as part of course assignments. As a non-traditional, first-generation undergraduate student, I found particular interest in research topics involving non-traditional students like myself. I found interest in the history of financial aid and the admission process in regards to a student who took less traditional routes to access higher education.

After World War II and the establishment of Higher Education Act of 1965, the primary goal of equalizing educational opportunity to lower and middle income students became a national initiative (Mullhern et al. 2015). These initiative were provided through grants and financial aid. However, in recent years student loans have become an important part of the equation. Since the Great Recession in 2008, many states have not invested in higher education at pre-recession levels, which were already low from the previous recession (Mitchell, Palacious & Leachman). This has

The U.S. is home to some of the greatest colleges and universities in the world. But with an overwhelming 1.3 million students graduating with an average student loan debt of $29,000 each and with youth unemployment elevated, the question of whether or not college tuition is worth the money arises (The Institute for College Access & Success, 2013). Higher education faces intimidating challenges: continually rising costs, access and completion problems, constant changing of technology, and responsibility pressures from state and federal officials. But no challenge is more intimidating than the fundamental question that many Americans face to ask themselves, "Is college worth the cost?" As a result of the economic turn down, many students who graduate are not finding well-paying jobs, either within their field of study or not.

The increasing cost of higher education in the United States has been a continuing topic for debate in recent decades. American society emphasizes the importance of education after high school, yet the cost of higher education and advanced degrees continually rises at a greater rate than inflation in the 1970’s. According to the Advisory Committee on Student Financial Assistance, cost factors prevent 48% of college-qualified high school graduates from pursuing further education (McKeon, 2004, p. 45). The current system requires the majority of students to accumulate extensive debt with the expectation that they gain rewarding post-graduate employment to repay their loans.

Since 1974, tuition has been on the rise and has reached new heights. One reason why tuition is increasing is because of “the state governments’ unwillingness or inability to raise per-student financing” (Davidson). The government is spending less on college and moving those funds into other categories, such as the military. Furthermore, colleges are spending less on each student than they did during pre-recession (Fox). Even after the recession, the government is continuously cutting more and more from education funds. As the government cuts more from education funds, tuition cost will steadily increase to compensate the loss. Tuition increased from 1994 to 2015 is depicted in the graph on the next page. Drawing a conclusion from the graph, it is possible that if this trend continues, public colleges will approximately reach the same price as private colleges one day. The amount of financial aid given is unable to meet the needs of lower income students,

Abstract: This paper will discuss the Federal Pell Grant and the legislation behind it as well as the Higher Education Act of 1965 and it’s reforms since then. This appears purpose is to show the faults within these programs and to then show possible ways people have tried to reform it. The final part of this paper will be my opinion on how the legislation can be fixed along with using data and information from recent research done on the subject. It is the hopes that these recommendations will then be used to further stabilize this piece of legislation in the future.

On July 21, 2015, President Obama addressed the VFW National Convention on the 70th anniversary of end of WWII, and said: “I consider it my obligation to help make sure that, even though less than one percent of Americans wear the uniform, that 100 percent of Americans honor your sacrifices and your service” (The White House, Office of the Press Secretary, 2015). In my own personal attempt to honor those who have served our country, I decided to learn more about the student veteran experience in the higher education environment. Not only am I researching student veterans because of the call from President Obama to honor their service, I’m interested in the topic from the taxpayer perspective. In November 2015, the U.S. Department of Veterans Affairs reported that $12 billion was spent on education benefits for over one million military veterans in the fiscal year of 2014. However, graduation rates for student veterans still lag behind their civilian counterparts (McCaslin, 2013), though it’s important to note that accurate information is still hard to find due to inconsistent reporting (Cate, 2014).

Conclusion: The “G.I. Bill” allowed veterans to obtain the educational benefits they deserved and had lasting effects on the system of higher learning in the United States. The recently graduated veterans were able to pursue a profession of their choice as they entered the job market. Moreover college campuses began to expand and adapt to the new diverse student population.

College enrollment skyrocketed as a direct result of the expansion of financial aid programs. Initially, the federal government’s involvement was restricted to providing financial aid to veterans pursuing higher education. By 1965, the federal government solidified its involvement within the realm of student financial aid by enacting the Higher Education Act. Title IV of the Act provided for “a guaranteed loan program that carried with it the full promise of the U.S. government to repay private lenders if a student defaulted on their loan.” The creation of this title lead to the creation of government subsidies, and eventually subsidized loans (Fuller). According to the Merriam-Webster dictionary, a subsidy is defined as “a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public.” The greater the amount of subsides that the government pays to lending institutions, the greater the guarantee that those lending institutions will continue to provide financial assistance to borrowers. Private lending institutions are guaranteed to turn a profit as a result of government subsidies, even if borrowers default on their loans.

During the 1940s, the number of individuals that returned to college increased considerably. In the late-1940s, father decided to go back to school, taking advantage of the government’s GI Bill, which provided tuition and cost of living expenses to honorably discharged individuals. Millions of people took advantage of this incentive, drastically multiplying the number of college/university educated

Presently, the availability of educational opportunities at the college and university level is a critical state and personal interest given the needs of the state for a well-educated workforce which has never been greater. Too many, the focal point of attending college is receiving a high paying job in the future. Unfortunately, in most states, tuition is on the rise and students who come from low-income families find themselves struggling to fund their education. According to legislatures, “The cost of college in New Jersey, as in the nation, continues to grow faster than the rate of inflation.” (State of New Jersey 1). In the national financial aid policy resources that are typically given to the neediest families are shifting towards

In 1958, the National Defense Education Act provided college students up to one thousand dollars a year in loans, but the average annual loan was actually only five hundred dollars or less because students could afford the rest of tuition on their own. Interest began at three percent a year after graduation and could usually be paid off in ten years. (Good 590-591) These statistics are a far cry from today’s, with student loan debt surpassing one trillion dollars and many graduates paying off loans well into middle age. As a result of the government shelling out billions of dollars in loans and inflation, colleges have had to increase their tuitions thus creating a college “bubble”. In the past year or so many political leaders have proposed plans to pay for two years of community college, such as President Obama, or for a full four years, such as Bernie Sanders, a frontrunner for the democratic candidacy. Even states like Tennessee,

The cost of tuition for higher education is quickly rising. Over half of college freshmen show some concern with how to pay for college. This is the highest this number has been since 1971 (Marill and O’Leary 64-66, 93). The amount of college graduate debt has been rapidly increasing also. With limited jobs available because of the high unemployment rate, college graduates find themselves staying in debt even longer. Although grants and financial aid are available to students, students still struggle to pay for their college tuition. Higher education costs are prohibitively expensive because the state’s revenue is low, the unemployment rate is high, and graduates cannot pay off their student loans.

In 2012 the funds for higher education had been cut by 7.6 percent, leaving most states in an education crisis that could have a negative effect on our nation. With the cost of college steadily rising, many students are left to rely on financial aid, which limits their ability to become a well-rounded student because they have to follow a strict class schedule that only goes towards their desired degree. Having these restrictions doesn’t allow them to take elective classes that they might enjoy outside of their degree. Since colleges are receiving less money from the government each year, they are forced to raise their cost of tuition to provide and maintain adequate learning environments to their students. While financial aid does give students