The Role of the Federal Government in Providing Financial Aid to Colleges and Universities - Research Paper Example

 The federal government provides financial aid to colleges and universities through funding research, direct support and individual student education. Both education and research are viewed as long-term investments in any nation’s future and provides the rationale for government funding in post-secondary education in general (Brademas 1982, 6). In investing in the nation’s future the federal government has provided funding for the US’ colleges and universities for many years. The Morrill Act 1862 also known as the Land Grant College Act, granted public land to each state for “the endowment…and maintenance of at least on college” for the purpose of educating in “agriculture and the mechanic arts” (Massachusetts Agriculture College v Marden State Treasurer et al 1982, 557). As a result of the Morrill Act 1862 approximately 20 government institutions of higher learning were established (Priest and St. John 2006, 154). An amendment to the Morrill Act in 1890 provided for annual grants to specific areas of studies. In the period between the Civil War and the First World War, the federal government had opened a number of programs for funding education and research in colleges and universities. These funding schemes however, reserved the right to audit expenditures and to approve plans (Priest and St. John 2006, 154). During the Great Depression, federal funding of education through research and student financial aid increased from US$21 million in 1930 to US$43 million in 1936. During the Second World War, federal government funding in post-secondary education increased to more than US$300 million in the year 1944. Most of these funds however went to research aimed at supported the war (Fuhrman and Lazerson 2005, 17). In the aftermath of the Second World War, the federal government passed the Servicemen’s Readjustment Act 1944 also known as the G.I. Bill provided funding for over 1 million war veterans to enroll in college. The allocated funds paid for tuition as well as subsistence (Livingston 2002, Ch. 7). The National Defense Education Act 1958 was aimed at funding higher education with a view to improving the US’s technological abilities. Today’s Perkins Loans flow from these initiatives and provided funding to colleges and universities who then lend the funds to students. The 1950s also saw a number of federal funding programs aimed at college and university research with a view to improving US military and technology abilities during the cold war (Babbidge 1959, 200-205). The Higher Education Act 1965 expanded the reach of federal aid for colleges and universities by providing grants and loans for student. Loans and grants however were and remain available based on individual and family needs. The Higher Education Act 1965 also funded college and university libraries and a variety of other programs. The Act is typically reviewed each five years and modifies how federal funding will be used to support individual education and provide institutional support for college and universities (Mumper 1996, 77). Since the passing of the 1965 Act federal government institution and research support for colleges and universities have grown from US$1.8 billion in 1965 to US$21 billion in the year 2000 (National Center for Education Statistics 2001). Federal aid to students grew rapidly since the passing of the Higher Education Act 1965. In the year 2000, approximately US$47.7 billion were allocated to financial aid for college and university students (National Center for Education Statistics 2001). Half of these funds were paid out in private loans while the other half were spend on grants, work-study programs and loan capitals (National Center for Education Statistics 2001). The objective of the Higher Education Act 1965 illustrates one of the primary roles of the federal government in providing financial aid to colleges and universities. The 1965 Act is aimed at responding to: …the appalling frequency with which a student is presently forced to forego the opportunity of postsecondary education because of inability to meet the costs (Mumper 1996, 78). The Federal Pell Grant was established under the 1965 Act (Federal Pell Grant Program). The Pell Grant Program is designed to assess the needs of students with low income and limited support. Students who qualify for the Pell Grant may use the grant at any one of the 5,400 colleges and universities participating in the Grant (Federal Pell Grant Program). Financial needs are assessed by the US Department of Education by evaluating and investigating information obtained from the applicant’s Free Application for Federal Student Aid and the expected family contribution (Federal Pell Grant Program). Subsequent amendments to the 1965 have restricted and relaxed the income criteria for student loan programs at various points. In 1997 congress introduced the Taxpayer Relief Act which created the Hope and Lifetime Learning tax credit program with respect to college tuition. This initiative targeted all families with an annual income of US$100,000. Essentially the Hope and Lifetime Learning tax credit program allows for deductions in income tax by providing credits for post-secondary tuition and fees (Perez n.d.). The federal government supports at least 62 percent of the college and university research facilities (Association of American Universities 2006, 1). In 2004 the federal government provided financial aid for college and university research in the sum of US$26 billion. These funds were divided as follows: 1. US$ 26.1 billion for basic research. 2. US$ 4.9 billion for applied research. 3. US$543 million in development (Association of American Universities 2006, 1). In most cases the federal government provides financial aid for college and university research projects based on government priorities. In this way, the federal government has a subtle role in determining the kind of research programs colleges and universities will conduct. This is because in order to receive federal government financial aid, researchers will typically target research areas that comport with the federal government’s priorities (Heller n.d.). Federal government financial aid to colleges and universities has the capacity to attract fellowships and can influence the field of study chosen by students. Essentially, the more funding a college or university receives for a specific field of study the more appealing it is for students. The funding improves teaching, libraries, laboratories and other related faciilties. Ultimately, federal government financial aid to colleges and universities shapes the direction of education. In other words, the role of the federal government in providing financial aid to colleges and universities is two-fold. First it ensures that greater opportunities exist for students to obtain an education regardless of income. Secondly, the federal government’s role in financial aid to colleges and universities is to influence emphasis on specific research areas that are considered to be beneficial to the nation as a whole. Works Cited American Association of Universities.(2006) “University Research: The Role of Government Funding”. AAU 1-3. Babbidge, H.(1959) “Higher Education and the National Defense Education Act.” The Phi Delta Kappan. Vol. 40(5), 200-205. Brademas, J. (1982) “Higher Education and the Nation’s Future”. Educational Researcher. Vol. 11(7), 6-9. Federal Pell Grant Program (n.d.) http://www.ed.gov/programs/fpg/index.html (Retrieved October 28, 2009). Fuhrman, S. and Lazerson, M. (2005) The Public Schools. Oxford University Press. Heller, D. (n.d.) “Federal Funds for Higher Education – History, Federal Support for Students, Federal Support for Research. Education Encyclopedia. http://education.stateuniversity.com/pages/1988/Federal-Funds-Higher-Education.html (Retrieved October 27, 2009). Livingston, S. (2002) Student’s Guide to Landmark Congressional Laws on Social Security and Welfare. Greenwood Publishing. Massachusetts Agriculture College v Marden State Treasurer et al (Supreme Judicial Court of Massachusetts, March 29, 1892) The Northeastern Reporter, Vol. 30, 555-557. Mumper, M. (1996) Removing College Price Barriers: What Government Has Done and Why it Hasn’t Worked. State University Press. National Center for Education Statistics. (2001) Digest of Education Statistics, 2000. Washington DC: US Department of Education. Perez, W. (n.d.)“Education Credits: Hope and Lifetime Learning Credits”. About.Com:Tax Planning: US. http://taxes.about.com/od/deductionscredits/qt/education.htm (Retrieved October 28, 2009). Priest, D. and St. John, E.(2006) Privatization and Public Universities. Indiana University Press. Read More