Financial aid is almost always a necessity to attend college these days. Tuition costs continue to rise and college students are becoming less likely to afford the costs even when their parents are helping defray the expense. In fact, the tuition at a four-year university increased by more than 6 percent in 2007. That is double the increase of inflation. Whether it is a federal loan, grant, scholarship, work-study program or other form of aid, finding extra money for college can help students get the education they need to compete in a tough job market.
History
Financial aid for college is nothing new. In fact, the concept has been around for hundreds of years. In 1643, Lady Anne Radcliffe Mowlson provided the funding so Harvard University could award the very first scholarship.
In 1954, 95 private colleges and universities formed the College Scholarship Service. This organization created a system to analyze and determine the financial needs of students who want to continue their education after high school. This was the basis of the philosophy that aid should be based on a student's needs. When the Soviet Union launched Sputnik in 1957, Congress blamed the American educational system for allowing the United States to come in second in the "space race." As a result of that, there was a greater emphasis placed on higher education and the funding needed to allow more students to go to colleges and universities.
The next year, the National Defense Education Act (NDEA) was enacted. It provided financial aid to educational institutes in the United States. This helped stimulate many areas of study, including mathematics, science, geography and more by providing about 90 percent of the funds needed to give students low-interest loans for their college education. The NDEA established the National Defense Student Loan Program (NDSL) which is currently known as the Federal Perkins Loan Program.
Throughout the next few decades, many programs and acts of legislation were created to make financial aid easier to get. Lyndon B. Johnson's Economic Opportunity Act, the Higher Education Act and the Middle Income Student Assistance Act were just a few of the pieces of legislation focused on giving financial aid to qualified students.
Types
There are several types of solutions you can apply to your financial aid problems. Scholarships are one of the most common solutions because students do not have to pay these back and they are often awarded for several semesters of study. Scholarships are generally based on need, academic transcripts, fields of study and family background. There are several scholarships through the government and private contributors and the school of your choice may even offer their own scholarships.
Grants are another solution to financial aid problems because grants are basically free money. Like scholarships, grants are also based on financial need and transcripts. Students must meet certain qualifications (usually a full-time status with a "C" average or better) or else the grant will be revoked.
If you do not qualify for scholarships or grants due to your family's financial situation or your academic transcript, you can check into loans and work-study programs. Work-study programs are ideal for students who may not have great academic transcripts because these programs are neither loans nor grants. Students work part-time at the university or at a job related to their course of study.
Time Frame
Whether you are just entering college or getting ready to graduate, you should find solutions to your financial aid problems as soon as possible. If you are getting ready to enter college, the sooner you find the financial aid to pay your tuition, the sooner you can attend classes. Most colleges and universities give you until the first couple weeks of classes before making you pay your tuition, but you don't want to waste your time going to classes and then find out that your financial aid didn't go through. After graduating, you want to find solutions to your financial aid problems rather quickly so you can pay off your debts before the interest accumulates. Federal loans give you a six-month grace period and three one-year terms of deferment if you have a financial hardship.
Benefits
There are several benefits related to financial aid solutions. When you are eligible for financial aid, you have the opportunity to go to a college or university and continue your education. As a result, you can learn the skills needed to go into the career or job field of your choice.
Another benefit of financial aid is that you may not have to work while you are in college. If you receive enough money through a loan, grant or scholarship, you may be able to use any money after paying for your books and tuition for living expenses. This allows you to focus on your studies, get better grades and be a better prospect in the job market after graduation. Or, if you decide to go to graduate school, it helps you be a better candidate for admission.
Warning
Student loans are one of the most common solutions to financial aid problems. However, these loans come due soon after graduation. Many students do not keep track of the loans they are accumulating during their academic career. After a few years, you could rack up thousands and even tens of thousands of dollars in loans. The interest rate on those loans doesn't stop even if you are in deferment. One solution to put off paying those loans for a short time is to go back to school and take some classes. Most federal loans allow you to delay payments interest-free if you are in school for at least half time.
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