A history of modern student financial aids

Higher education in the United States is known for its diversity; but even more diverse than the system are the methods used to finance it. These methods are, in many ways, a reflection of a pluralistic society trying to work out a democratic way of life within a federal system of government.The types of individuals and groups contributing to institutions of higher education have not changed significantly in the last three hundred years, but their relative contributions have shifted dramatically as the role of higher education in American society has changed. This support has taken two general forms: direct appropriations to institutions and financial aid to students.The end of World War II is a watershed in the history of higher education in the United States because the aggregate cost of education started to rise at an unprecedented rate at that time and it has continued to increase. The three variables which have mainly influenced the costs of higher education since the War are: a growth in the size of enrollments, an enlargement in the functions performed by the institutions, and a lack of growth in man-hour productivity within higher education. The rate of population growth will not be a major factor in college costs after the late 1970's, and there is considerable evidence to indicate that the percentage of population entering college has reached a maximum. However, the demands for services are not abating; and there seems to be no technological breakthrough on the horizon that will enable educators to equal the average three per cent per year increase in productivity experienced by the rest of the economy. This will make education relatively more expensive than other family purchases, and this difference in prices will become progressively larger.Most of the student financial aid programs now in existence were enacted after World War II. These programs were established to meet a rather bewildering variety of national, state, and private needs; but the enhancement of education was seldom the primary purpose for which a given program was developed. In particular, the over-all confusion in the federal programs can be attributed to the fact that each was conceived under the stress of a particular crisis, was therefore narrow in scope, and was independent of other existing programs. There was, and is, no general policy regarding the role of the federal government in higher education.If the direct costs paid by the student are added to the foregone earnings, the average student pays approximately seventy-five per cent of his total educational cost with the public accounting for the remaining twenty-five per cent. Approximately seventy-five per cent of the lifetime income of a college graduate above that which he would have received as a high school graduate can be attributed directly to the college experience. Twenty-five per cent of our recent growth in the gross national product has been the tangible effect of the increased educational level of the labor force. Thus, the balance of private and public benefits and cost would seem to have been reached--at least in terms of the crude accounting terms we have at our disposal.From the standpoint of "equity" and "efficiency" in the investment of resources in higher education, both institutional appropriations and student financial aids have certain merits. The author maintains, however, that society is best served by a diversified system of higher education and financing of higher education similar to the one we now have where the costs and benefits to the individual and society are of the same order of magnitude. To insure this diversity, the financial supporters of higher education should be kept so numerous as to prevent any one contributor from assuming economic control.Thesis (Ph. D.