DEFINITION of 'The Higher Education Act of 1965 (HEA)'

The Higher Education Act of 1965 is a law designed to strengthen the educational resources of the colleges and universities of the United States and to provide financial assistance to post-secondary students. The HEA, as it is known, increased federal money given to post-secondary institutions, developed scholarship programs, provided low-interest loans to students, and founded a National Teachers Corps. Part of President Lyndon B. Johnson's Great Society domestic agenda, the Act was signed into law on November 8, 1965.

BREAKING DOWN 'The Higher Education Act of 1965 (HEA)'

The Higher Education Act of 1965 included six titles:

Title I: Provides funding for extension and continuing education programs.
Title II: Allocates money to enhance library collections.
Title III: Provisions for strengthening developing institutions.
Title IV: Provides student assistance through scholarships, low-interest loans, and work-study programs.
Title V: Provisions for improving the quality of teaching.
Title VI: Provisions for improving undergraduate instruction.

The Higher Education Act of 1965 has undergone multiple reauthorizations and amendments, including the addition of new title initiatives.

What the HEA Provides

The HEA led to the establishment of a variety of financial aid options made available for students attending secondary schools in the U.S. Financial assistance programs such as Pell Grants and Stafford loans were created as a direct result of this legislation being put into effect.

Pell Grants, which do not need to be repaid, come from federal funding and are available to undergraduate students only. The amount offered under the grants is based on financial need, the cost of attending the school, and the students’ standing for full-time or part-time attendance. There is also a maximum amount of funding per recipient, which is set by the legislation that reauthorizes the grant program.

The Stafford loans, which can be direct subsidized or direct unsubsidized loans, are offered to students in need of assistance. For direct subsidized loans, available to undergraduate students who demonstrate a financial need, the amount of financing is determined by the school they are attending. The interest on such loans is paid by the U.S. Department of Education as long as the student remains enrolled at least halftime in college. The interest is also covered for six months after they leave school. Direct unsubsidized loans do not require a financial need to be presented and are available to graduate students in addition to undergrads. The college or university will determine the size of the loan in relation to other financial assistance that was received. The borrower is responsible for repaying all of the interest on this type of loan.

RELATED TERMS
  1. Stafford Loan

    A Stafford loan is a type of federal, fixed-rate student loan ...
  2. PLUS Loan

    A PLUS loan is a federal student loan where the parent borrows ...
  3. Pell Grant

    A pell grant is a program that provides money to eligible undergraduate ...
  4. Award Letter

    Award letter is the documentation sent from a college or university ...
  5. IRS Publication 970

    IRS Publication 970 is an explanation of the tax benefits associated ...
  6. Education Credit

    An education credit type of tax credit available to students ...
Related Articles
  1. Personal Finance

    How to Fund a College Education

    College is expensive. Luckily, the government, many institutions and private lenders offer ways to help students pay for college.
  2. Personal Finance

    College Cost Reduction Act Helps Students Meet Payments

    This legislation can help families pay college costs and reduce student debt.
  3. Financial Advisor

    Disadvantages of Federal Direct Loans

    Federal Direct Loans are popular ways to get federal help with college costs. However, they do have some drawbacks, especially for graduate students.
  4. Personal Finance

    Your Kid's College Loan: Who Should Foot The Bill?

    Discover the federal student loan options for both parents and students.
  5. Personal Finance

    College Loans: Private vs. Federal

    Not all student loans are the same. Learn the difference between federal vs private student loans.
  6. Taxes

    A Look at the Cost and Tax Treatment of College

    Is there more we can do to improve the affordability of post-secondary education? We take a look at how students and colleges are taxed today.
  7. Financial Advisor

    Federal Direct Loan Limits

    How much you can borrow depends on your grade level in college, whether you're an undergraduate or grad student, and other factors.
  8. Personal Finance

    Interest Rates Rising on Student Loans, Starting July 1

    Federal student loan interest rates will rise as of July 1, Non-freshman have less than a month to borrow at the old rates.
RELATED FAQS
  1. Can student loans be used to pay rent?

    In most cases, loans can be used for housing costs, but students should still plan to have some cash on hand. Read Answer >>
Trading Center