The first financial aid appeared with the first American college, Harvard. Harvard was established in 1636, and just a few years later in 1643, the first scholarship was provided to a Harvard student. It took nearly 200 years for additional financial aid to appear in the U.S., and again, it was at Harvard with the first student loan in 1840.
Financial aid staggered through the rest of the 19th century and into the 20th without many changes. With the end of World War II came the return of thousands of American soldiers. President Franklin Roosevelt signed the Servicemen's Readjustment Act of 1944 into law, which later became referred to as the G.I. Bill. Though controversial at the time, the G.I. Bill has since been credited for allowing anyone to attend college.
Although America was recovering from the war, a new challenge was arriving. In 1957, the Soviet Union successfully launched Sputnik, and with it, American insecurity that its own space program could not compete. Congress issued the National Defense Education Act (NDEA) a year later to promote higher education in science, mathematics, and modern foreign languages.
After the G.I. Bill, higher education became an attainable goal, and the NDEA encouraged college education as a measure of national security. Congress continued support of Americans attending college with the passage of the Higher Education Act of 1965. The bill enacted formal financial aid for Americans in the form of grants, scholarships and loans provided and guaranteed by the federal government. The Higher Education Act formed the basis for the next 40 years of financial aid in thttp://write.demandstudios.com/edit.php?articleid=1777616he U.S.
The next few decades saw the continuation of the Higher Education Act. Congress continued to support students' attendance with renewals of the bill. Each reassertion provided additional aid to more and more would-be students, including those who could never have achieved a higher education without financial aid.
While more and more students were able to attend college, and it was easier to attain with the new Free Application for Federal Student Aid, or FAFSA, which was established in 1992 and signed into law by President Clinton in 1993. The FAFSA allowed students to submit one form to obtain scholarships, grants or loans depending on their financial situations. Financial aid became timed to ability to pay, but still provided government subsidized support for those without large incomes.
At the same time, criticism over the financial aid process was growing, and higher education was becoming increasingly expensive. To streamline the process, the William D. Ford Federal Direct Loan Demonstration Program (Direct Loan Program) was established in 1992. This bill sought to eliminate the guaranteed loan program that was dependent on private banks and a federal guarantee. The Direct Loan Program issued financial aid grants and loans from the federal government, reducing the need for a "middle man."
The guaranteed loan and the Direct Loan programs continued side-by-side for another more than 15 years. Yet, the cries against continually more and more expensive college costs and Americans' hardships to pay for it increased. Finally and after a party-line vote, Congress voted on and President Obama signed into law the Health Care and Education Reconciliation Act of 2010. The financial aid-relevant portion of the act eliminated the guaranteed loan program, calling forth a new era in American financial aid.