Tag Archives: Fraud and Waste

Understanding the purpose of federal financial aid


Another semester has begun at the colleges and universities across our nation.  As any college faculty or staff member will tell you, there is a lot that goes into preparing for the beginning of a new semester.  Even students and their families are aware of the pains that the fall semester can bring – after all it is the beginning of the academic year.  As a part of this annual event, parents and students spend a considerable amount of time completing the Free Application for Federal Student Aid (FAFSA).  For scores of students, if it were not for federal financial aid in the form of Pell Grants and federally guaranteed student loans, there would be little to no hope of them being able to afford to attend college.

As a part of my job as an adjunct instructor, as is with all college and university instructors across the United States, I am required to keep attendance and comply with both federal and institutional reporting guidelines.  At the particular college I work at, the second week of classes, the week after mid terms, and the week before finals I am required to complete reports that indicate students that have either quit attending the course or whose absences are going to cause them to fail the course.  Federal financial aid requirements demand that those receiving federal financial aid must make significant academic progress towards a completion of their degree each semester or risk losing their financial aid for the following semester, or in some cases, an entire academic year.

As each semester begins, I do take the opportunity in each course syllabus to explain the financial aid reporting requirements.  I also briefly present a warning to students about taking the attendance requirement seriously as attendance not only assures them of a higher course grade but will ensure them of remaining eligible for continued federal financial aid.  This semester and in front of a class of about 25 other students, I had a male student actually tell me that he was not worried about attendance because it was his money; he completed the paperwork and he was entitled to it. Unfortunately there are a large number of students and parents that have the same mindset when it comes to federal financial aid.

Federal student financial aid was designed as a way to lift the working poor of our nation into the middle class.  Although efforts to create federal aid did exist in the early 20th century, it was not until the passage of the Higher Education Act of 1965 that the desire to help the working poor achieve their academic goals actually became a . It was the intent of the federal government that the program would not become regarded as another social entitlement program but an investment into the future of the nation and the individual college student.  The aid package would cover the cost of education, at no cost to the student, with the expectation that upon the completion of a degree, the student would enter the workforce and become a tax paying citizen.  Not only does the former student experience an increase in earnings and standards of living, but the taxes paid to the local community, state, and federal government would generate more revenue over time than what was invested in the recipient.  It would ideally be a win-win for government and the recipient.

In 1972, the Higher Education Act was amended to incorporate other forms of financial aid in addition to reforming the entire program.  Some parts of the program, such as the Basic Educational Opportunity Grant (formerly the Economic Opportunity Grant Program) would not only have a name change, but would be made available to more Americans.  In 1978, the federal student aid program would go through additional changes under President Jimmy Carter.  The Basic Educational Opportunity Grant would have its name changed to the Pell Grant and two existing student loan programs, the National Defense Student Loan Program was reorganized and its two components renamed to the Federal Direct Student Loan Program and the Federal Supplemental Educational Opportunity Grant.  Additionally, jurisdiction for both new programs was changed from the Department of Defense to the newly created Department of Education. President Carter also expanded eligibility to all federal student aid programs to include even more of the middle class and would make eligibility for the Pell Grant the main criteria for receiving all other forms of federal student aid.

More on page 2