The Adoption Of Financial Aid
FinancialAidPolicy:LessonsfromResearch SusanDynarskiandJudithScott-Clayton NBERWorkingPaperNo.18710
The main question asked about student aid was “Does it work?”. In the nearly fifty years since the adoption of higher education act of 1965, financial aid programs have grown in scale. As a result, financial aid has become the norm among college enrollees. In this article, I will provide significant information about the foundation of financial aid and establishment, the largest sources for aid and how to apply for aid.
On Novermber 8, 1965, president Lyndon Johnson signed into law the higher education act of 1965, which established the federal government as the main provider of financial aid for college. ” In his remarks that day at Southwestern Texas State College, President Johnson said, “To thousand of young men and women, this act means the path of knowledge is open to all that have determination to walk it.” Years later, college enrollement has expanded and average aid per student has grown “almost double between 1971_72.” (financial Aid Policy). The U.S. Department of education were focused on student with low income, than student with high income. Those with low income were usually the only ones considered for the Aid. However, Nowadays Aid flows not only to college students, but also to part-time students, older students, and students who never graduated from hight school. Today, however, aid is available not only to low income famolies, but also to middle-class and even high-income families. And the aid is provided not only by the U.S Department of Education but also by the U.S Department of Treasury and by state governments. multible other forms of governments support, including work-study programs, and private aid are also available.
“The federal loan programs and the Pell Grant were the two largest sources of aid for college between 1990 and 2010.”( Lessons For Research,pg6). The higher Education Act Of 1965 established the Educational Opportunity Grant Program, which allocated funds direclty to cleeges to identifying and recruting students with “excaptional financial nee.” Later that program was split into the Supplemental Educational Opportunity Grant (SEOG) program, that delivers funds directly to colleges, and the Basic Educational Opportunity Grant (BEOG), that delivers funds directly to students. “The BEOG program, was renamed the Pell Grant in 1980.”(Lessons for Research). After Senator Claiborne Pell OF RHode island, expanded eligibility to students attending part time, as welll as to those in vocational education or community colleges. Wjile there was no income limit in Pell receipt, majority of recipients have family incomes below $50,000, which in 2010 was lightly above the median of U.S. household incomes.The definition of who is “needy” under the Pell rules has occasionally shifted, sweeping into Pell eligibility students from the middle of the income distribution. Some of these shifts resulted from explicit efforts to open the program to a wider range of incomes: the Middle Income Student Assistance Act of 1978, as its name suggests, expanded eligibility for Pell Grants to middle-income families. More subtly, increases in the maximum Pell grant award (the usual focus of legislative debates over Title IV funding) bump up the average grant of current recipients but also expand eligibility for the Pell further up the income distribution. This dynamic has been clear in recent years, when the Pell maximum rose substantially, from $4,689 in 2008 – 09 to $5,550 in 2010 – 11 (in constant 2010 dollars). Over the same period, during which median family incomes were dropping, the share of Pell recipients with income over $50,000 rose from 6 percent to 9 percent. that shows changes over time in the number of Pell recipients and the average Pell award among recipients. Adjusting for inflation, the average Pell Grant was flat or decreasing for most of the period between 1976 – 77 and 1995 – 96 , but large increases since 2008 have raised the average Pell award to a historic high of $3,828. Even these large recent increases, however, have barely kept pace with rising tuition prices: th e “purchasing power” of the Pell actually declined slightly from 33 percent of public four-year tuition in 2008-09 to 32 percent in 2011 – 12.( Financial Aid Policy, pg 11-14)
To apply for financial aid, students must complete thr Free Application for Federal Student Aid (FAFSA). This form, which most students now complete online, is aslo required for many state and institutional aid programs. The form requests information about students’ own income and savings, their parents’ income and savings, their recipt of various other types of govermental assistance, and the amounts of other income and liabilities (such as education, tac, credit, child support). Once FAFSA is filed, the information is processed under one of eight formulas, depending on family income, whether a student is classified as dependent or not, whether the student has children. Students must wait for schools to admit them and present them with details of their aid package. Different schools may offer the same student different amount of aid. Delay and complexity in the aid proccess means that students’ application is being reviewed or need further information. Federal tax benefits are distributed in an entirely seprate process, through the annual filing of income tax return. Colleges provide documentation directly to the IRS of a student’s enrollment and tuition payments. A disadvantage of the education tax benefits is that they are distributed only after coasts are incurred.