Impact of Financial Aid on Educational Environment - Dissertation Example

?Running Head: Impact of Financial Aid on Educational Environment Impact of Financial Aid on Educational Environment [Institute’s ] Abstract Quality education is accessible for students if they are determined and willing to opt for it. Students are provided financial aid in this regard to help them support their educational expenses. This research paper includes the types and categories of financial aids that are made available for students who seek to acquire higher education. It also includes how several factors can affect a student’s receiving of loans and grants. Also, the importance of education, particularly, that of college education has been discussed shortly at the beginning of this paper. Furthermore, how racial differences can hinder the process of acquiring financial aid by African American students has also been discussed. Table of Contents Abstract 2 Table of Contents 3 Introduction 4 Literature Review 5 Introduction Many students ask this question when they are about to graduate from high school that why it is so important for students to acquire higher education. It certainly is since it provides a number of opportunities to people who wish to raise their standards of living and excel in their respective field of education. Higher education is an outlet to various opportunities and therefore its importance cannot be denied (Wilkinson, 2005). Going to college expands the horizon for students as they advance from lower educational level to higher educational level and experience a more broadened aspect of everything they have been seeing all their lives up till now. College lets a student learn more than just from books. It allows students learn from the excellent experienced professionals creating a remarkable experience in learning and acquiring the right set of attributes to excel. If we think beyond the job aspects of acquiring higher education it is quite important for our own development as well. It lets us be a better person in our society and helps us educate people around us (Wilkinson, 2005). Though acquiring higher education can be difficult, it is not impossible. Many financial aids program help in this regard. What we need to understand is that are these financial aid programs, in any way, affecting the student’s educational environment. There could be varying answers to that. This paper gives a detailed review of how these financial aid programs can affect student academics. How financial aids vary from one another according to the needs of the students and are it true that financial aid programs depict a bitter reality of our society, portraying the ugly picture of racism. These questions lead to a deeper analysis of whether choosing to have something better in life would free a student from discrimination and differences that are built on part of these institutions. How students can have several problems related to choosing for the right program and applying to it. Many students are found to have face problems in following the instructions. This could be a major hindrance in achieving their goals. This paper also explains how academic performance of a student can greatly affect his receiving of financial aid from his own institution or federal ones. Altogether, these are various circumstances and conditions, which directly and indirectly affect the process of acquiring financial aid for a college student. Some of these factors conceive further hidden factors that are considered taboo, people do not want to talk about it, people want to hide it, but the reality remains in its place. This paper also includes the types and categories, which are designed for individual students to accommodate their requirements. Literature Review Economy regulates one’s life. How it is supposed to be lived, economy decides as it steers people into a direction where they can survive. Henry David Thoreau (1996) explains in his book how economy has changed the way men used to live, “But lo! Men have become the tools of their tools. The man who independently plucked the fruits when he was hungry is become a farmer; and he who stood under a tree for shelter, a housekeeper. We now no longer camp as for a night, but have settled down on earth and forgotten heaven. We have adopted Christianity merely as an improved method of agriculture. We have built for this world a family mansion, and for the next a family tomb. The best works of art are the expression of man's struggle to free him from this condition, but the effect of our art is merely to make this low state comfortable and that higher state to be forgotten” (Thoreau & Thomas, 1996) There is not anything in a world that defies the importance of education. It paves the way for an individual to live a better life. It paves a way for an individual to explore things in a more broadened term. It lets an individual create a more specific and enlightened set of opinion about something which holds true and defines the substantiality of the entity. As quoted by Brigham Young (1850) Education is the power to think clearly, the power to act well in the world's work, and the power to appreciate life (Young, 1856). James Baldwin (1963) states the importance of education in his words as follows: The paradox of education is precisely this that one begins to become conscious one begins to examine the society in which he is being educated. Education is a human being is basic right as is his other rights are. Call it a gift of nature or a cursing, education serves positively all along if one determines to acquire it to the best of his capabilities, to enhance his surroundings as well as the life he lives in. As stated above, education could be a curse for someone who does not understand the basic purpose, the basic message the education comes with. Some people take it as a mean of misusing their educational abilities to work for their own self-interest, and not for the entire society (Baldwin, 1963). According to Stulberg (2011), the economic downfall has hit every part of this world. There is not one individual who has not suffered from the bitter consequences of the weakened economy and is striving hard for his survival in order to live and maintain a quality standard of life which we all dream of and work for. How has this situation affected the students, talking in general, students find themselves in much critical position as compared to others. Analyzing the current economical situation around the globe we can see how every object is interlinked and is producing effects directly and indirectly on one another (Stulberg, 2011). Referring to financial needs of people where one does not simply explain as to how far the fulfillment of their needs can take place due to rising competition among people and organizations to outdo each other, for a college student it is the most difficult scenario where he has to cope with the changing economical situation. The cost of college expenses has given them quite a big blow in this recession and most of them opt for financial aid to support their education. Kinser (2002) believes that in a prevailing environment where people are looking for ways to increase their income to be able to bear the daily life expenses, students find themselves struggling more than anybody else on the globe does. Financial aid is one way students can take a sigh of relief and continue their education with the hope of achieving their goals and objectives. Being a college student one can take a deeper look into this situation and understand how the recession has produced indirect effects on him/her (Forest, Kinser, & Kinser, 2002). Choosing financial aid to continue the college education has been proved very helpful for a large number of students since they get their desired qualification and later pay the liability that occurs on their part in form of the aid. There are several types of financial aids devised for students, which fit into their own set of requirements and affordability (Gururaj, Heilig, & Somers, 2010). Several governmental organizations and private institutions offer financial aids for undergrads as well as graduate students. Particularly, college students are found to be using these aids more than other students since bearing the college expenses is impossible for a working student. An educational institution provides two types of aids. These are known as the merit-based aids and need-based aids. They differ from one another in that the former aid is given to students who give excellent performance in their academics and the latter one is for those who hold eligible for the aid due to their low income and greater college expenses. Financial aids that students could use include Loans, which are further divided into government loans and private loans. Scholarships are divided into school scholarships and private scholarships and last but not the least is grants. Loans are simply the money students borrow for their educational expenses such as tuition fees and books. Federal government generates loans by letting the student apply online to a financial institution or through personal contact (Willmer, 2011). Government loans are considered the ideal loans for students since they offer the best rates at which one can apply and receive the financial aid and then return them in a designated time span. Students’ college or schools are affiliated with the financial institutions in order to provide them easy access. They also look into the capability of a student to return the loan by examining his income and then setting a reasonable interest rate so that he can easily pay back the loan without any hassle. Sometimes students who have a low income and cannot pay the interest amount are given the relief of not paying the money with full interest. Instead, the government takes the responsibility of paying the financial institutions on the student’s part. On the other hand, some students cannot avail this ease due to many factors such as non-citizenship. In this case, students can apply for private loans that are they apply for financial aid directly to the institution. In this type of loan, generally the interest rate is higher. This could affect a student’s decision to continue his education since difficulties arise in paying back the loan with interest rate that is charged by the bank. Therefore, the method through which a student receives financial aid can greatly affect its capability of pursuing higher education. For a college student, finding a job to support his education has become quite difficult as the money has become scarce and a large number of people are looking for jobs to fulfill their needs in a given budget set. The universities or even the community colleges suffer from monetary losses and cover their expenses by increasing the tuition fees, which creates a financial burden on students. Henry (1980) believes that grants on the other hand are also one of the easiest ways needy students can continue their education. Grants are offered without the condition of paying them back, which is an advantage for students, but it comes with some price. There is one type of grant known as Federal Pell Grant. All needy students who cannot bear their educational and housing expenses become eligible automatically for this type of grant. They can easily apply free by contacting their institutes directly and submitting an application. Then there is another type of grant, which comes with certain terms. It is especially for those students who have passed their first year of college with a minimum GPA of 3.0. This type of grant is called Academic Competitiveness Grant that is solely for students who maintain their academic performance on the top. This implies some policies devised by the student’s institute, which needs to be considered. The grants are given on a fixed amount, which differs for first year and second year students. TEACH, Teacher Education Assistance for College and Higher Education Grant is another grant, which can be very helpful for students who are looking forward to a career in teaching. This grant is available to both undergraduate and graduates who select the courses, which in future will lead to a teaching position in their respective college or school. Other prominent types of grants include subject grants, minority grants (for African American students), student specific grants, and degree level grants. These grants are customized according to the needs of the student’s financial obligations (Henry, 1980). Another best way to acquire financial aid is through the way of scholarships. It is the best approach because the student does not have to lower its dignity or waste his precious money on the high interest rates that come along loans taken from financial institutions. It does not require the student to lower his self-esteem by receiving grants. Scholarships are academic awards given to students who excel in their academic performance and receive the deserving price money that they need to pursue higher education. The advantage of scholarships is that it does not only frees a student from financial expenses of college education and housing but also makes his way into doing more than what he is doing at the present. It lets student do better in their respective academic field. Scholarships are offered by two ways. One way is the school scholarships. Schools offer their students financial aid through this type of scholarship by examining their current GPA and other contributions that are made in their respective field or other necessary courses such as athletics and arts. Some students are awarded a fixed amount while others are awarded the complete package as long as they are to remain enrolled in the school. Private scholarships are offered by private organizations to deserving students. Their criteria vary from those of school scholarships. Sometimes they organize contests to award the winners. This type of scholarship is also one way students can utilize their particular talents to win them money for their education. Students should deliberate and discuss before taking any decision since they have to make the right choice for themselves in present and future terms, both. Deciding on from where to take financial aid and how to apply for it is simple but sometimes students get confused with the number of formalities attached with the process and certain obligations are necessary for them to perform. To choose between the types of financial aid the student must look into his accessibility first. If they are good enough to opt for a scholarship then it can ease them in many ways as stated earlier. Financial aid programs are often kept specific for some types of students. They include the Military Program Aid. This type of financial aid is given to students who wish to opt for a career in military services. Their requirements vary from those of usual students seeking education in their respective fields. Lastly, Savings for College is another way of financing education. It is very important for parents to start saving for their child from today as the grants and scholarships only cover a part of the college education expenses. For this purpose, there are many saving programs for parents, which let them deposit a fixed amount on a regular basis, which in future accumulates into their child’s college expense. It is less expensive to save than to lend money through loans because saving let us parent store small amount of money on a regular basis without cutting down on other necessary expenses. Beside this, Henry (1980) also believes that many problems can encounter student once they apply for their desired colleges. Financial problems as to how they will bear their educational expenses are something every student or at least 80 percent of them is worried about. Some colleges are unable to give their students what they really should. They are unable to provide scholarships and grants and so they look for enrolling students who are not poor or can afford their college expenses to some extent. Students unable to take responsibility in either case are sometimes not enrolled by the colleges even if they deserve to be there. This is a major problem, which is arising these days. In combination with these, other problems may also occur when students look for pursuing higher education. When applying for financial aids students face several problems during the process. These problems can be of lack of knowledge of the rules and regulations of applying for financial aids. There are always certain rules and regulations devised for every process because this is how the system works and these obligations separate every function from another (Weinberg, 2010). Students commonly get confused with these rules and regulation since they do not thoroughly research for the particulars that are required by them to produce and to maintain after receiving the financial aid for their education. For example, many students fail to understand at what time interval they will be receiving the financial aid. Some colleges and schools have different period of academic terms and in accordance with it, the money is transferred to the student’s account at the beginning of the term. The verification of financial report produced on behalf of the student decides the Pell Grant given to the student and often students become confused with what information to include in the report. Students may have a chance of receiving financial aid from other sources and if they do so, they should inform their respective institute so that an adjustment can be made to the aid. While many students do not understand this rule, it causes a problem and leaves them confused when the reduction is made on their loan for that time. On other hand, when students apply for on-campus employment, they are often faced by rejections until it is approved by the administrative services. In this case, students should receive approval before applying for the job. Failure to understand these rules and regulation may lead students to turn down the financial aid options since it becomes difficult for them to accommodate other options that are available to them in terms of job. These sometimes turn into a hassle for the students and so some of them may discontinue their higher education or it may adversely affect their educational environment. Moreover, if students fail to provide the required FAFSA details they will not be eligible for applying for the financial aid. FAFSA is an index, which is prepared annually by college students to assess their financial position in granting loans for education. Some students may not know it too well as often their institutes face disorganization and they fail to inform students about the procedures and processes that are necessary for them before applying for the financial aid. If a student fails to provide the information, he may lose the opportunity to avail the loan. There is always a deadline imposed by the government for FAFSA and if students cannot supply the government with the required information before the deadline, they suffer. Overall, the entire student aid process is hectic and requires a lot of complex information. This may affect a student’s decision of continuing his education because if he fails to provide the accurate information he may be exempt from receiving the loan. Other factor, which may adversely affect a student’s educational environment, is the delay in receiving the financial aid. Sometimes when the financial aids are delivered late, students find themselves lacking behind in terms of paying bills and other educational expense. Thus, this creates an agonizing situation or most students and affects their education as well as personal lives. This also negatively affects a student’s credit since he has to arrange for the occurred expenses, which are due because of the delayed financial aid. These factors altogether greatly influence a college student’s educational environment and these factors have leaded to reversing their decisions for higher education. However, a positive relationship can be seen between the college enrollment and the financial aid (Becker, 1993). The financial aid tends t decrease the cost of college expenses that makes it feasible for students to enroll themselves. A positive effect is made on the educational environment of the student since this makes him/her want to invest more into their higher education. Students’ demographics are varying since our planet earth is a mixture of several different types of races, creeds, castes, and religions. Not to forget how cultures are becoming more diversified depicting a multifaceted aspect of this world. Some students believe and perceive that financial aids are given based on race. Student demographics include their ethnicity, gender, and age. These categories are used only to maintain a statistical record for the financial institutions and not for giving away the loans on racial discriminations. The Civil Rights Act of 1964 clearly states that education is prohibited from racial discriminations however in the present era there is a lot more than meets the eye. According to H. G. Wells (2010), “Human history becomes more and more a race between education and catastrophe. Most universities have rules and regulations that are set differently for each type of students. It will not be wrong to say if they have been discriminating between the students based on racial and ethnic differences because many researches and reviews have pointed out the major fact that most African American students do not receive educational loans based on merit. US Department of Education also seems to generate a relevant report that clearly explains that black students are not given the same advantage as their white fellows. This discrimination is the root cause of students dropping out from college and ceasing their educational careers, mainly the African American students (Wells, 2010). It has also been seen that a very small percentage of black students were given the merit-based loan in the year 2007. This is why most students drop out of college. In contrast, there is another side of the picture, which states that African American students are being paid loans on a large basis than the white students. This depicts a diverse situation for students when it comes to take financial aids since some entities are performing exactly opposite to each other in this regard. The small percentage of student receiving the financial aid was based on their academic achievements, thus making it more difficult for all the students to receive financial help. This indicates that not all students are able to get scholarships because only a small number of students make it to the top with the rising academic competition. If these students are not provided the enough financial support, it could lead to a great discouragement and loss on the part of our society. As W. E. B DuBois (1903) says, the function of the university is not simply to teach bread winning, or to furnish teachers for the public schools or to be a centre of polite society. It is above all, to be the organ of that fine adjustment between real life and the growing knowledge of life, an adjustment forms the secret of civilization (Bois, 1903). Studies have shown that when college expenses are aided through financial aids, students with varying ethnicity and race tend to retain their enrollment in college (Seurkamp, 2007). Mary Pat Seurkamp (2007) explains that the changing demographics will bring diversity to the classrooms of our colleges and since these it is important for these diversifications to meet, the world of higher education must prepare itself for the new upcoming challenges it will be facing. Analyzing the current situation and the situation from the past centuries, it is obvious to see how women are striding in the educational department doing better and better day by day. There seem to be a large number of female students enrolled and schools and colleges as compared to male student (Seurkamp, 2007). Female students, due to the pre-dominant society where males seem to steer the direction where the society leads on to, find themselves in a difficult position of earning. For this, government and many private institutions have come forward to assess the situation themselves, and found a way to help the women who wish to pursue higher education in their lives. For female students several different types of loans and grants have been issue meeting their requirements for personal and educational purposes (Seurkamp, 2007). Not only this, but these grants and loans are made substantial each year to help these women do better in their respective fields. This type of financial aid is known as the gender based financial aid. This may greatly affect the educational environment as the number of female students enrolled would increase, decreasing the number of male students in educational institutions. One of the prominent grants includes the American Fellowship, which allows the American female students to complete their dissertations for PhD. However, undergraduates who are parents may find it difficult to pursue with their higher studies as it brings in many risks that they need to consider before getting them enrolled. Sometimes completion of the degree becomes possible for such students. Age of students also influences and affects receiving of financial aid. This should not be considered as age discrimination since students of all ages are eligible for financial aids according to their educational and personal requirements. In some cases, when the government is giving away the financial aid to students it does not imply that student be of certain age. Instead, they only require a student to produce a report for FAFSA so that his application can be processed. Only private institutions have the freedom to put age limitations. Under the Civil Rights Act of 1975 an organization that receives federal funding, colleges are not allowed to discriminate based on age. Thus, it is always important to discover who is administering the college financial aid before going for the option. For students categorized under the age of 24 and above, financial aid are devised in a different way. These students are commonly called the non-traditional students as they begin their educational venture later in life when feasible. For these students, governmental or private institutions as well as their institutes provide scholarships and college aids based on age. Scholarships for older students require an age after which any student who wishes to pursue higher education can avail this service. For students who are pursuing a bachelor’s degree, private scholarships are generated. They receive grants from private sources in comparison with those of traditional students. The case is similar for students who pursue certificate degrees etc. A student, which are independent, living away from home and that are older than 24 years of age does not require producing financial information of their parents. For students, which also come in the category of senior citizens, scholarships take a diverse form. Sometimes many colleges offer free tuition for these students under certain circumstances. For some citizens, such as those of above 55 years of age, grants are given for their own personal use, they are free to pass it on to their grandchildren or children, or foster children who wish to pursue higher education. This creates an opportunity for students who fail to receive financial aid for what so ever reason. This is imposing a positive effect on students as they now look to it in a more clear way and think seriously about continuing their education. It is indeed good news for college dropouts who for any reason could not continue with their education in their previous lives can now look forward to it. This greatly increases the number of people acquiring education and making their lives better. Other demographics, which may affect include the family incomes. Loans and grants vary for families with high income and families with low incomes. This comes with varying interest rates that are affordable by the families, specially the parents. If one can afford to pay the greater interest rates then a specific financial aid is designed for them however after careful investigations only these loans are generated to the families. This let us students from different classes pursue higher education without a problem. If it were not for this categorical discrimination, students could find themselves in a position of nowhere. According to the research conducted by Simon Fraser University, those students who receive financial aid perform better than those who do not. As a comparative analysis of the two types of aids, students with merit-based aid outperform those who have need-based aids. Therefore, overall, financial aid can excel a student’s performance by freeing him from other worries and giving him a chance to concentrate on his academics and opt for academic challenges to improve his abilities. A student’s academic progress also plays an important role in helping him acquire financial aid. These criteria, which are pre-defined by the financial aid helpers before candidates, can apply for financial aid request. These criteria define which students hold eligibility for financial aids. These criteria are not strict but are rather reasonable. Undergraduates are made to maintain a certain GPA while graduates are made to maintain a different score of GPA. If these criteria are not fulfilled then the student holds no eligibility for financial aid unless he has defined his reasons to not being able to fulfill the requirements. There could be a possibility of having a negative impact on students if they fail to fulfill these requirements. Some students may take it the other way and not understand the basic rule. It is important for students to maintain a good academic score so that it is unfair for the institutions to give financial aids to students who deserve no good than others. Institutions have to keep a check on whether the receiver of the financial aid deserves enough. By setting these criteria, institutions make students oblige them to opt for good education. As they promise financial aids only if the student is serious enough about his academic goals. Discussed above were innumerous factors, which directly or indirectly affect a student’s life. Be it the financial problems itself or the discrimination on various plots, everything equally affects a student’s educational environment. Some pose positive effects while others pose negative ones. It is for the students to decide which path they want to continue their journey on. Students greatly affected by these negative factors eventually give up on their missions and goals and look for other options to spend the days of their lives but it is to be understood that if they continue and strive for their goals nothing can hold them back and they will continue to be an example for many generations to come. Students need to be straightforward and should know what they want from life. Having set their goals will make them see life from a more mature aspect and they will be able to make good life decisions. College education is certainly, what everyone dreams for and many choose to work hard in order to be educated and make their society a better place. There are many hurdles to acquire it but with the proper set of guidelines, one can overcome these negativities and continue with their journey of life (Henry, 1980). References Baldwin, J. (1963). A Talk to Teachers. The Negro Child – His Self-Image, 8. Bois, W. D. (1903). The Souls of Black Folk. Retrieved on June 15, 2012: http://www.bartleby.com/114/ Forest, J. J., Kinser, K., & Kinser, K. (2002). Higher Education in the United States . Santa Barbara, Calif. : ABC-CLIO. Gururaj, S., Heilig, J. V., & Somers, A. P. (2010). “Graduate Student Persistence: Evidence from Three Decades.” Journal of Student financial Aid. Volume 46. Henry, J. B. (1980). The Impact of student financial aid on institutions. Chicago: Jossey-Bass. Seurkamp, M. P. (2007). Changing Student Demographics. Retrieved on June 15, 2012: http://www.universitybusiness.com/article/changing-student-demographics Stulberg, L. M. (2011). Diversity in American Higher Education: Toward a More Comprehensive Approach. 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