Financial Aid & Student Loans

Today’s student loans and financial aid are almost one. Given for college kids go to school Few parents have the financial resources to pay the full tuition for their children, so that most students complete the FAFSA and applying for loans. This has not always been the case, however. Student loans are a modern invention.

The first recorded student loan program was developed by Harvard University in 1840. These loans early disciples were private loans that were not funded by the government. In 1935 the state of Indiana General Assembly passed a law that provides financial support to students who scored high test scores on their entrance exams to college. This led to the formation of financial support from the Indiana State Association, or ISFA, which was followed by the opening of the financial aid office for the first time at the University of Indiana. Schools soon joined the ISFA, and students of Indiana had a new way to pay for school.

On October 4, 1957, Russia successfully launched a satellite for the first time in space. This had a huge impact on the history of U.S. financial aid because the U.S. government realized they were in a race to put the first person in space. They realized that the only way to succeed in this race was to ensure that as many high school graduates and university attendance possible, something that was beyond the financial resources of many. With the guidance of the ISFA, the federal government created a work program of financial aid.

After the Second World War, Congress passed the National Defense Education. This law introduced the Perkins loan, a low interest loan offered to low-income students and has a repayment term of 10 years. This was the first federally backed student loan, and that soon. In 1963, the Health Education Assistance Act provided loans to students pursuing careers in fields of medicine and health. This was followed by what is now known as the Federal Work-Study, a program that allows the federal government to pay the wages of working students.

In late 1965, most student loan programs that we use today, such as the Stafford Loan Program Work-Study and Perkins Loans, were in place. As the cost of education continues to rise, the government introduced the PLUS loan program for parents in 1981, a program that allows higher-income families get help paying for college. Today, these loan programs allow many students to pursue an education that otherwise could not, so a valuable resource for our country, we strive to remain a world leader.