Mini History of Federal Student Loans

Universities have been increasing cost of attendance every year since the great depression.The reason why is simple, supply and artificially inflated demand. Before World War II, higher education wasn’t readily available for everyone. Post war, the US passed the GI Bill of Rights, enabling 8 million middle class veterans to pursue a degree. Alongside the Perkins loan inaugurated in 1958 - the US continued giving government aids for new buildings, professors, exploding the higher education business into what it is today with federal aid money that made college affordable.  

College-aged student attendance rose from 15% in 1940 to 40% by 1970.Then as quickly as attendance went up, aid started tumbling down.

In 1970 the tuition and fees increased to match the inflation that was occurring. The government was unprepared for such a high sticker price after 30 years of normalized spending, and shifted from full aid - to subsidized loan programs. That didn’t stop colleges in their tracks, as they simply found other sources; parents, students, banks to cover the gap. Today students and at times their families are taking on student loans that impede big financial steps, for example; buying a house, getting married, having kids, opening up that taco stand, etc. Student loans are at an all time high, and with a college degree today being a requisite for upward mobility in the workspace, it’s probably not going to stop anytime soon. So the question is.. where does the buck stop?

Martha Rodriguez