Reasons why i Need Financial Aid

Introduction

Financial aid in the context of higher education can be described as financial support that institutions or specialized organizations provide to students to help cover the costs of their education. As tuition costs continue to rise, so does the need for financial assistance. Several types of financial aid might be available to students. Two main types are grants and scholarships. Not repaying is the main difference between this type of financial aid and a loan. Students might also qualify for work-study and loans.

Through work-study programs, undergraduate and graduate students earn work experience by working part-time while in school. There are subsidized, unsubsidized, and PLUS loans. Financial aid is of particular importance for some students and their families since it may enable students to pursue higher education. The rising costs of attending post-secondary institutions and the increasing numbers of students desiring such a credential support the importance of this issue.

This essay will address the problem of students without access to financial aid by first considering the need for such aid, which may best be viewed in terms of education as well as social equity. The initial section of this essay identifies the need for financial aid in the context of higher education. Pertinent issues for such consideration include a review of social equity and the cost barriers often encountered by students. This section of the essay will also identify objective goals. The issue of need, and a definition for risk and risk factors affecting students without financial aid, is also addressed in this essay. Remember, the need for financial aid and for directed aid derives from economic concerns — and how much worse the problem becomes in a growing post-industrial economy that now depends heavily on the adaptive reflex of a global workforce. This means that an educated citizenry is a national resource. But it is also connected to the nation's issues of social equity and social mobility.

Barriers to Higher Education

Obtaining higher education without any form of financial aid is nearly impossible for many students. Beyond the myriad costs of tuition, books, materials, and housing, students may also face wage loss if they must enroll part-time or leave employment in order to attend a degree program. Consequently, many students choose not to enter higher education or do not complete their program. The high cost of tuition and lack of financial resources are detrimental to divergent participation in higher education. Related to enrollment or degree completion barriers are complicated student aid application processes or inadequate aid program information.

High tuition and fees play a significant role in preventing youth from pursuing higher education. A survey of middle- and high-school students found that a significant percentage of them rejected pursuing higher education out of fear of mounting student debt. Existing research has also found connections between cost expectancy and entrance exam scores; income expectancy and attendance and abandonment rates; and college financial stress and student enrollment numbers and grade point averages. Also, anxiety related to educational debt correlates with graduating seniors beginning job searches over two months earlier than those not reporting debt stress. In low-income communities, where college is referred to as a distant anticipation, few run into a parent, instructor, or another role model who attended a postsecondary institution. Even in a previous year, a significant percentage of students or their parents did not know their credit rating before applying for student financial aid. Filling out the FAFSA is made difficult by instruction spreadsheets and a lengthy instruction manual.

Impact of Financial Aid

Financial aid has been proven to impact students positively in numerous ways. Proven effects of financial aid include more successful educational outcomes, psychological benefits, and improved opportunities in the labor market. Comparative studies have shown that more students receiving aid, when measured as a percentage of the whole student population in a state system of higher education, will have higher retention rates and graduation rates. Relying on psychological theory, studies have also found that when students receive enough financial aid to fully or mostly meet their need, they are less likely to drop out of college and are more likely to return in future semesters than similar students who have less need fully met through financial aid. These results suggest that if students believe they cannot financially continue, they are less likely to apply psychological effort, perform well in classes, and are more likely to drop out.

Financial aid helping students pay for college will most immediately allow them to focus on their educational experiences rather than tire themselves working one or multiple jobs to pay their way. Additionally, financial aid changes the psychological impact that academic work and achievement have on traditional and non-traditional students. The positive influences of financial aid on a variety of student populations, including adult learners, Asian Pacific American and Chicano students, Native American and African American students, and Hispanic students, have been noted. Lastly, there is a large body of literature that has investigated student loan indebtedness in college graduates and the subsequent retention and choice of profession and lifestyle of the graduates. Overall findings suggest that when students worry less about survival in college, they require less work to do so. Therefore, they are more likely to focus their energy on program programming, which will lead them to obtain their certificate or degree, which they will in the future use to secure a job with a family-sustaining wage.

Economic Benefits of Investing

While some of the benefits of financial aid may accrue to the students directly, some of the benefits reflect the value of educating a well-trained workforce. Students who are able to earn college degrees because of financial aid represent a more educated future workforce that can fuel economic growth through higher productivity. Cutting back financial aid, therefore, does more than hurt individual students; in the long run, it hurts the very people and governments who cannot afford to make college investments on their own. But just how much would we gain as a society by doubling our investment in state and federal financial aid? Higher state spending on financial aid grants to community college students is associated with higher incomes for all college graduates and not just those who receive increased financial aid. Not only do these college graduates see economic gains, but the community as a whole becomes more productive and the economy grows. Students who received grant aid were less likely to default on their loans than those who did not. In the long run, treatment students paid higher taxes than the control students, generating higher net tax revenues for the government. From an economic perspective, spending government money through direct financial aid grants to college students is a wise investment. Chosen wisely, financial aid grants can go a long way toward reducing income inequality. That makes the education grants not a type of welfare spending, but an investment in human capital that aids labor market efficiency - the very reasons federal and state policymakers joined their constituents in endorsing the potentially substantial expansion of resource allocations going to finance aid in the first place.

Conclusion

The challenges of paying for higher education are substantial. Students and families without adequate financial resources or access to credit choose from various unattractive options. They can forgo postsecondary education or attend part-time. They can also opt for a less expensive two-year public program instead of a bachelor's degree. Students with financial need are also more likely than others to work long hours and are more likely to be the first in their family to go to college. They are also more likely to be Black and Hispanic—a barrier to both college entry and completion. Increasingly, the higher education financial aid system in the U.S. is not making the choice about whether, but rather where, to go to college affordable. Before students decide where to go, they should be able to decide where to apply. Financial aid programs, if designed well, can reduce or eliminate the costs of higher education. Furthermore, the receipt of such grant aid is related to matriculation and increasing the probability of being enrolled in a four-year college.

To improve access, state and college administrators can take many actions. Policymakers can expand funding for grants. Some advocate converting loans to grants, but other policymakers are concerned about the impact this would have on program costs. Another possibility is to change policies toward awarding so-called "merit aid." More funding could be targeted at high and very high need students. Reducing the importance of non-need characteristics such as academic merit in granting aid sends a message that these characteristics are not important for aid programs, which in turn sends a potentially positive signal and would increase students seeking aid. Policymakers could also create more public awareness about the importance of financial aid and provide assistance in applying. A significant percentage of all students eligible for financial aid did not apply for an aid program that helps pay for college. In addition, this research does not reveal the source of these unapplied students. This is another research area: identifying those students who are most likely to be eligible and encouraging them to apply. Moreover, current research also does not assess the cause of the non-application. Are these students left uninformed that aid is available? Most likely, one cause is the complexity of the aid application process. Yet, direct-mail campaigns and increased media coverage are making an impact on the share of students who are applying. Offering information and assistance to college students to help pay for school could increase the probability they enlist and complete their postsecondary education. And if they do, earnings are likely to be substantially higher due to the increased labor market quality of college graduates. Therefore, increasing access to postsecondary education is not only important to individuals, but also to society, including the U.S. labor market and its employers. The health of the U.S. economy depends increasingly on the ability to have a skilled labor force in order to remain competitive in the world marketplace. It is agreed that a college education is essential to remaining internationally competitive.

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