Financial Aid

by

Donald E. Heller

• LAST REVIEWED: 15 December 2011
• LAST MODIFIED: 15 December 2011
• DOI: 10.1093/obo/9780199756810-0015

Introduction

Financial aid refers to money provided to students to help them pay the tuition, fees, and other charges associated with attending postsecondary education. Financial aid is both a practitioner and a scholarly field. Practitioners include those professionals in universities, governmental agencies, and nongovernmental organizations (NGOs) who are responsible for managing and administering financial-aid programs. Scholars who generally come from fields such as education, economics, political science, and public policy conduct research on the effects that financial aid has on a number of outcomes, including but not limited to access to college, college choice, retention and persistence through college, degree attainment, student experiences and behaviors in college, equity and diversity, social outcomes, and post-college behavior and experiences. Financial aid can be provided in different forms, including the following: grants (also known as “scholarships” or “bursaries”), which are discounts provided to students to reduce the price of college attendance; loans, which allow students to overcome credit constraints and postpone when they pay for postsecondary education; and work study, which is a program of subsidized jobs for students while they are enrolled in college. Each of these forms of financial aid can be provided from different sources, including governmental organizations, colleges and universities themselves, and private sources such as philanthropic or service organizations as well as commercial providers. Financial aid is an important part of the postsecondary financing system in the United States and has existed since the first universities were developed during the colonial era, but the United States is not the only country that has financial aid for college or university attendance. Other countries around the world have developed financial-aid systems in more recent years, though because financial aid is a more recent phenomenon in these other countries, there is generally less research and data available than in the United States.

General Overviews

There are a variety of books that cover different aspects of financial aid. Few would be considered classic textbooks; more are the result of research studies conducted on the effects of financial aid, as noted in the introduction. Leslie and Brinkman 1988 provides an excellent meta-analysis of research studies on the impact of financial aid on college enrollment and persistence. Kane 1999 and Mumper 1996 provide historical and economic analyses of state and government financial aid programs, while McPherson and Schapiro 1998 and Wilkinson 2005 focus more on aid provided by institutions to students. Heller 2002 covers all three of these sources of aid, as does Hoxby 2004, which approaches the topic from primarily an econometric perspective. Johnstone and Marcucci 2010 provides a contemporary overview of financial aid policies from a comparative and international perspective. Barr and Crawford 2005 provides a contemporary take on student financial aid policy in the United Kingdom.

• Barr, N., and I. Crawford. 2005. Financing higher education: Answers from the UK. London: Routledge.

  Presents a history of student financial aid in the United Kingdom from the mid-1980s through the 2004 Higher Education Act.

• Heller, D. E., ed. 2002. Condition of access: Higher education for lower income students. ACE/Praeger Series on Higher Education. Westport, CT: Praeger.

  An edited volume with chapters on government efforts as well as the efforts of colleges and universities to utilize financial aid to promote college access for lower-income students. Shows how those efforts have succeeded or failed.

• Hoxby, C. M., ed. 2004. College choices: The economics of where to go, when to go, and how to pay for it. Chicago: Univ. of Chicago Press.

  Collection of papers by economists, sponsored by the National Bureau of Economic Research, most of which are empirical analyses of the effects of financial aid on college participation.

• Johnstone, D. B., and P. N. Marcucci. 2010. Financing higher education worldwide: Who pays? Who should pay? Baltimore: Johns Hopkins Univ. Press.

  An overview of the current status of financing higher education in countries around the world, with an emphasis on cost sharing, or the shifting of the burden from government financing to student resources.

• Kane, T. 1999. The price of admission: Rethinking how Americans pay for college. Washington, DC: Brookings Institution.

  Analysis of the American postsecondary financing system and where it has failed to meet social needs. Also includes proposals for reforming the system.

• Leslie, L. L., and P. T. Brinkman. 1988. The economic value of higher education. New York: American Council on Education/Macmillan.

  A classic meta-analysis on the research behind tuition prices and financial aid on college access, choice, and persistence. It covers research over the approximately three decades up to the date of publication.

• McPherson, M. S., and M. O. Schapiro. 1998. The student aid game: Meeting need and rewarding talent in American higher education. Princeton, NJ: Princeton Univ. Press.

  One of a series of books on financial aid written by the same authors, with a focus on governmental and university grant programs for subsidizing the cost of postsecondary education.

• Mumper, M. 1996. Removing college price barriers: What government has done and why it hasn’t worked. Albany: State Univ. of New York Press.

  A history of the efforts on the part of governments (both federal and state) in the United States to provide aid to college students, and the impact these efforts have had on college access, choice, and equity.

• Wilkinson, R. 2005. Aiding students, buying students: Financial aid in America. Nashville: Vanderbilt Univ. Press.

  A history of financial aid in the United States, written by a British scholar. Covers the period from the colonial era through modern times. Concludes with recommendations for reforming the system.