In 1972, college tuition costs were significantly lower than they are today. However, for most students, the idea of attending college was still out of reach due to the high cost of tuition fees. As a result, many students could not afford college, and those who did often had to work several jobs to make ends meet.
Fortunately, in 1972, an association was founded that changed the landscape of college financing: the Student Loan Marketing Association, commonly known as Sallie Mae. Sallie Mae was created as a government-sponsored enterprise whose primary role was to provide funds for student loans.
With the creation of Sallie Mae, students were allowed to borrow money to attend college without a cosigner or collateral, making it much easier to cover tuition fees. Today, Sallie Mae continues to provide loans to college students, ensuring that those who wish to pursue higher education have access to the funds they need to succeed.
In 1972, What Association Made Borrowing Money To Attend College Much Easier Than It Had Been?
In 1972, a new association was established that would dramatically change the landscape of higher education financing. The Higher Education Amendments of that year created what we now know as the Federal Pell Grant program.
This program was designed to provide scholarships to financially needy students who would otherwise be unable to afford college. Unlike previous aid programs, the students did not have to repay the awards to the government.
This association was a response to the growing concern over the rising costs of higher education and the limited availability of scholarships. The government recognized that many of the population, particularly those from low-income families, could not attend college due to the high tuition fees.
The Federal Pell Grant program aimed to tackle this issue by providing millions of students with the means to receive a college education. By helping offset the tuition cost, the Pell Grant allowed students to focus on their studies rather than worrying about how they would pay for their education.
The Pell Grant program remains one of the most popular and effective programs for making higher education accessible to all. It continues to provide students with the financial aid they need to pursue their dreams.
The table below shows the number of Pell Grant recipients and the total amount of Pell Grant aid disbursed for the academic years 1973-74 through 2020-21.
Academic YearNumber of Pell Grant RecipientsTotal Pell Grant Aid Disbursed (in billions of dollars)
1973-74 176,000 301
1990-91 3,175,000 6.4
2020-21 6,679,220 28.7
Thanks to the Federal Pell Grant program, the dream of attending college has become a reality for millions of students who may not have otherwise had the opportunity. The association’s creation marked a pivotal moment in higher education financing history, and its impact will continue to be felt for generations.
Impact On College Students
The creation of the Student Loan Program by the Higher Education Act in 1972 had a significant impact on college students. This program made borrowing money to attend college much more accessible, leading to a surge in college students.
Here are some of the effects of the Student Loan Program:
- Increased access to higher education: With the ability to obtain loans, more students could afford college tuition and expenses. This made higher education more accessible to students from lower-income families and those who would have found it difficult to pay for college otherwise.
- Rise of for-profit colleges and loan companies: The Student Loan Program also opened doors for private, for-profit colleges and loan companies to enter the market. Students could now attend these colleges by taking out loans from these private companies. This led to an increase in tuition costs and student debt.
- Higher student debt: Although the Student Loan Program provided access to education, it also meant that students graduated with more debt than before. As the cost of tuition increased, students had to take out larger loans, leading to a rise in student debt.
- Positive socioeconomic and cultural change: Despite the increasing debt, the Student Loan Program helped to create positive socioeconomic and cultural change. It allowed more students to attend college, which led to a more educated workforce with higher earning potential.
Table: Statistics on Student Debt
YearAverage Student Debt
2000 $17,000
2010 $25,250
2020 $32,731
Overall, the Student Loan Program significantly impacted higher education in the US. It allowed more students to attend college, leading to higher debt and the rise of for-profit colleges and loan companies.
Criticism And Controversies
Despite the benefits of the association that made borrowing money to attend college much easier than before, there were also some criticisms and controversies surrounding it. Here are some of them:
- Increasing student indebtedness: One of the major criticisms of the association is that it led to increased student loan debt. As borrowing became easier, more students took out loans to pay for college, increasing student indebtedness. This has been an ongoing concern, as many graduates struggle to pay off their student loans after graduation.
- Widening disparities in access to higher education: Although the association made it easier for many students to borrow money to attend college, it also widened the disparities in access to higher education. Students from low-income families, for example, were less likely to have access to the same level of borrowing as their wealthier peers, making it more difficult for them to pursue higher education.
- Negative impact on the economy: Some critics of the association argue that it hurt the economy, leading to a rise in loan defaults and decreased consumer spending. With more graduates burdened by student loan debt, they may be less likely to spend money on other goods and services or invest in other areas of the economy.
- Inadequate support for students: Another criticism of the association is that it failed to provide adequate support for students struggling to pay off their loans. Some borrowers faced high interest rates, penalties, and fees, making it even more difficult to repay their debts.
In summary, the association that made borrowing money to attend college much easier than before had its fair share of criticisms and controversies. While it benefited many students by providing access to education, it also had negative consequences such as increased student indebtedness, widened disparities in access to higher education, negative impact on the economy and inadequate support for students struggling to repay their debts.
Conclusion
To sum up, in 1972, President Nixon signed the Higher Education Act into law, which included several provisions aimed at expanding access to higher education for all Americans. One of the key provisions was the creation of the Federal Family Education Loan (FFEL) program, which made borrowing money to attend college much easier for millions of students.
Under the FFEL program, eligible institutions could offer federally guaranteed student loans at reasonable interest rates, with the federal government assuming much of the risk of default. This allowed students who might not otherwise have been able to afford college to borrow the money they needed to pay for tuition, books, and other expenses.
Today, the FFEL program has been replaced by the Direct Loan program, which offers federal education loans directly to students without the involvement of private lenders. However, the legacy of the FFEL program lives on in the millions of students who were able to attend college and pursue their dreams thanks to access to affordable student loans.
In short, the Higher Education Act of 1972 was a landmark piece of legislation that paved the way for greater access to higher education for all Americans. Creating the FFEL program made borrowing money to attend college much easier and helped millions of students achieve their dreams of earning a college degree.
