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Student Loans
Funds available for student loans have grown from $590,000 in 1939-40 to $44,098,000 in 1976-77. Of this latest figure, $25,302,000 have been received from the federal government under legislation which was first enacted in 1958 in response to a need for more trained citizens, as a result of the Russian Soviets' success with the first satellite launched in 1957, known as "Sputnik." In 1964 the Health Professions Educational Assistance Act was passed to provide matching funds for student loans in the fields of dentistry, medicine, nursing, and pharmacy. The remainder of the University loan funds have been made available from gifts, and $3,321,000 from University funds to match the federal provisions as required by legislation. Federal legislation also provides collection insurance guarantees for a part of the University loans.
Since the first loans were granted in 1897, the University has awarded $84,498,000 in loans to students. In 1940-41, 2,080 loans were issued for $155,644, for an average loan of $75, compared with 17,747 loans issued for $9,545,413, for an average of $538 per loan during 1976-77. During World War II, the number of student loans dropped to about 400 a year, and then rose to nearly 4,000 during 1946-47. Student loans issued during 1950-51 dropped to 2,527 after most of the veterans had graduated. Since 1950-51, there has been an almost uninterrupted growth in the number of student loans granted per year, the average size student loan, and the amount of loans outstanding. As of June 30, 1976, 52,726 loans amounting to $40,696,000 are outstanding.
The increased demand for student loans is due to a number of factors. During this thirty-seven year period, 1940-41 through 1976-77, Michigan resident tuition rose from $120 to $928 per year, an increase of 673 percent. The room and board rate for a double room increased from $382 to $1,512 for a 296 percent rise. Enrollment in 1940-41 was 12,051 compared with 45,823 students for 1976-77, an increase of 280 percent.