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5 The 1970s: Equalizing Educational Opportunity The federal role in student aid expanded in the late 1960s and early 1970s, as did the state role in funding public higher education. States expanded public systems in response to growth in the size of the traditional college -age populations (i.e., the baby boom generation), founding new campuses in large state systems (Lee and Bowen 1971, 1975). The earliest federal student aid created before the 1960s, such as the GI Bill, was made available to special groups in society. The Higher Education Act, passed in 1965, formalized the federal role in student aid by making aid generally available. After 1965, the federal government awarded needbased grants as a means of providing financial access for low-income students. In 1972, the notion that student aid should equalize the opportunity to attend a private college was firmly established by a reauthorization of HEA. However, in 1978 student aid programs were broadened to include middle-income students as well as low-income students . The price tag for the new programs was considered too high, given the emerging concerns about the cost of social programs. Analysts soon began to examine alternative ways of constraining the costs of federal student aid (Hansen 1983; St. John and Byce 1982). Thus, federal aid programs were adequately funded for only a brief period in American history , a period of equalizing educational opportunity. Step 1: Changes in Policy The federal role in student financial aid emerged after World War II, with the GI Bill of Rights. Many of the earlier student aid programs were workforce related, and some began before World War II (Finn 1978). The early federal grant programs, including the GI Bill, were specially directed , aimed at addressing workforce needs in specific areas (e.g., health care, the military). The National Defense Student Loans program (NDSL),1 75 1 NDSL, created by the National Defense Education Act, was renamed National Direct Educational Loans and reauthorized in the HEA of 1965. It continued to be referred to as NDSL. jhup.stjohn.000-000_jhup.stjohn.000-000.qxd 5/16/14 8:27 AM Page 75 the first generally available federal program, was created in 1958. The generally available programs provided aid to students based on their financial need. In 1964, the federal government created the Social Security Survivors Benefits program as the major specially directed program. It provided generous grants to children of a deceased parent who had contributed to Social Security. It was the largest federal grant program in the 1960s. The program played an important role because of its size and focus on poor families. Social Security Survivors Benefits provided a safety net that enabled many children in at-risk situations to attend college who might not have been able to attend without this aid. However, since benefits were not awarded based on a generally accepted need-analysis formula, they were often overlooked in analyses of the effects of student aid. Such specially directed aid supports students in specific circumstances and can influence students’ choices in much the same ways as need-based aid. Federal programs that provided generally available loans and workstudy were created before the passage of HEA in 1965, one of President Johnson’s Great Society initiatives (Gladieux and Wolanin 1976; Finn 1978). HEA consolidated generally available programs, NDSL and College Work-Study (CWS); created a major new grant program, the Educational Opportunity Grant (EOG) program);2 and created a major new loan program, Guaranteed Student Loans (GSL, renamed the Federal Family Education Loan Program [FFELP] in 1992; I refer to this program as GSL throughout the book). Students could apply directly to a state guarantee agency or the federal government for a GSL loan. It was the first generally available and portable federal aid program. Under GSL, students made a choice of where to go to college. The loan functioned as a quasi-entitlement, something like a voucher. The other programs included in HEA were distributed to campuses based on applications made by colleges and universities. And while the federal government required that the campus-based programs be awarded aid according to financial need,3 these programs were not portable. Students could not take their grants with them from one campus to another. Thus, the foundation for federal student aid was established in 1965, with substantial programs that were both need-based and specially directed . The new programs focused on equalizing opportunity (i.e., the 76 UNDERSTANDING...

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