Educate Yourself: Student Loans and Financial Aid

Student loans and financial aid is absolutely par for the coarse these days when kids go off to college. I don’t know many parents that can afford to pay the entire cost of a college education, so these families fill out a FAFSA to apply for loans. This hasn’t always been the way. Educational loans are a relatively new invention.

We can thank Harvard University for starting the first ever student loan program in 1840. In the beginning stages of student loans the government wasn’t involved at all, they were privately funded. Indiana’s General Assembly passed a law in 1935 that provided student loans to individuals that had excellent test scores on college entrance tests. Indiana University opened the first financial aid office after the law passed and the State formed the Indiana State Financial Aid Association or ISFAA. IFSAA membership grew rapidly as other schools followed Indiana University lead and now the residents of Indiana had a new way to pay for college.

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