Student Loan History
The history of student loans goes back several hundred years to a colonial women named Lady Anne Molson ( sometimes ann and/or Mowlson), born Anne Radcliffe (sometimes Radchyffe) who was an early benefactor of the colonial Harvard College.
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When her husband, Thomas Moulson, died in London in 1638, she was bequeathed half of his estate. He served as the Lord Mayor of London in 1634. It was in 1643 that she donated some of the money in her estate to endow a scholarship at Harvard College. It wasn’t a university yet.
Radcliffe college was the women’s part of Harvard and when it was separated in 1894, they named it after Lady Molson.
In 1840 the first student loan was started at Harvard University.
The creation of the US Department of education occurred in 1867.
But the modern student loan was initiated in Indiana in 1935 when the Indiana Student Financial Aid Association was established as the first financial aid assistance.
From 1935 until today, financial aid has grown into a major fund for students to be able to afford to continue to higher education after high school.
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Of course, the greatest student load program was the GI Bill, which was initiated in 1952. Its official name was the Veterans Readjustment Assistance Act. This bill gave loans to veterans of World War II and later for Korean Ware veterans. It continues today for veterans of the Iraq and Afghanistan conflicts. This bill and others brought the original GI Bill passed in 1944 as the Serviceman’s Readjustment Act passed in 1944 during World War II up to snuff with the current day requirements.
The United States had a rude awakening on October 4, 1957 when the USSR launched the world’s fist Earth-orbiting satellite. The space-race had begun and the United States was behind. It had to catch up with the USSR in science and technology. To make this happen, it immediately passed the National Defense Education Act to beef up private and public education. This program is still in effect today, but the name has been changed to the Federal Perkins Loan Program which offers lo-interest student loans at 5% which can take as long as 10 years to repay.
After the Civil Rights Act of 1964, student loan programs were passed at a furious rate to enable lower income students a chance at higher education.
The Pell grants bill was passed in 1980, named after Senator Claiborne Pell of Rhode Island, which reauthorized the Higher Education Act.
Two other less known acts owe their establishment to Senator Pell. These are the National Endowment for the Humanities and the National Endowment for the Arts. These tow acts over the past 40 years, have enabled nearly 100,000 high school and college teachers have taken advantage of these acts and increased their knowledge of the humanities which they then passed on to their students.
In 2007, the House and Senate passed the College Cost Reduction and Access Act of 2007 and became the “largest increase in federal student aid since the GI Bill, paid for at no cost to the taxpayers by cutting payments to lenders and guarantee agencies”.
To administer all the loans granted by this legislation, an agency was set up to handle the piles of paperwork. In 1966, the National Association of Student Financial Aid Administrators (NASFA) was established to handle the details. It is the largest student financial assistance program organized to promote low cost financial aid for low income students and others. IN 2007, FASFA announced that it will no longer mass mail paper FASFAs to schools and libraries. Students can now complete the FASFA application online which will save money and reduce waste.
All these student load program take a mountain of paperwork to maintain and trying to understand them is a full time job for anyone to be able to make sense of the huge bureaucracy that has grown up to enable low-income student to continue their education at institutes of higher learning.
Click here to learn more about Online Student Financial Aid.
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Adult students have a lot to contentthan traditional college-aged students. They have the demands of jobs to contend with as well as the stresses of trying to find financial aid that will allow them to go to university.