by easytolearn-trade-now on September 24, 2011 in Uncategorized
Today student loans and financial aid are almost a given for college kids heading off to school. I don’t know many parents that can afford to pay the entire cost of a college education, so these families fill out a FAFSA to apply for loans. This hasn’t always been the way. Educational loans are a relatively new invention.
We can thank Harvard University for starting the first ever student loan program in 1840. In the beginning stages of student loans the government wasn’t involved at all, they were privately funded. Indiana’s General Assembly passed a law in 1935 that provided student loans to individuals that had excellent test scores on college entrance tests. Once this law passed Indiana formed the “Indiana State Financial Aid Association” (ISFAA) and the first Financial Aid office at Indiana University opened shortly thereafter. Indiana University was followed by other colleges and universities shortly thereafter who quickly joined ISFAA and allowed Indiana residents a new way to pay for a higher education.
The first successful satellite was launched into space by Russia on October 4th 1957. This fact made our government realize early on that we were in a race with Russia to put the first man into space. To win this race the government made sure they would put a plan into place that would make college affordable for every American. To that end the federal government, with the help of ISFAA, put into place the first ferderal financial aid program.
Soon after World War II, Congress handed down the National Defense Education Act. This act launched the Perkins Loan, a low-interest student loan that’s offered to low-income college students and offers a 10-year pay back period. That had been the first federally backed student loan, and more would quickly follow. In 1963 the Health Education Assistance Act made loans for college students seeking diplomas in medical and health career fields. This was followed by what is at present known as the Federal Work-Study Program, a program that enables the federal government to pay the income of working students.
By the conclusion of 1965, The majority of of the student loan plans we use nowadays, including the Stafford Loan, Work-Study Program, and Perkins Loan, were in place. Since the cost of education continued to rise, the government launched the Parent’s PLUS loan plan in 1981, a plan that allowed higher-income families to get help in paying for school. These days, these types of loan plans allow many college students to pursue an education when they might otherwise be unable to, making them a valuable resource to our nation as we struggle to continue as a international leader.
September 24, 2011 | 15 Comments Posted in Uncategorized
