Students have increasingly looked to the web for financial aid.
Over the past decade and a half, the internet has made it easier for families to learn about, find, and apply for college scholarships, government grants, and other types of student financial aid. This transformation of the financial aid industry continues even today with a simplified federal aid form and a new XML data standard that will make applying for scholarships easier than ever.
I have acted as a catalyst for some of these major developments and have a unique perspective on the role of the internet in paying for college.
I founded the FinAid web site in the early 1990s to help people plan for and pay for college by making the process easier to understand and more efficient. FinAid was one of the internet’s first web sites, not just one of the first web sites about student financial aid. It is also one of the oldest web sites still in existence.
The FinAid site started as a collection of answers to frequently-asked questions about paying for college. I published a book about scholarships and fellowships for math and science students with Prentice Hall in July 1993 and received questions by eMail. Rather than answer the same questions again and again, I posted the answers to a web page and responded with instructions on how to access the web.
A few months later I started proactively answering questions before they were asked, and then the web site took on a life of its own. Today the FinAid site has more than 100,000 new unique visitors a week and is still the most popular web site for student financial aid information, advice, and tools. Since the site’s inception, it has helped more than 50 million people figure out how to pay for college.
Before the advent of the web, there were dozens of fee-based scholarship matching services. Students would complete a paper profile with details of their academic, extracurricular, and personal backgrounds and mail it with payment to the scholarship matching service. The scholarship matching services would compare the profile with a database of scholarships and respond to the student a few weeks later with a printout of all the matching awards.
In 1994 I approached each of the major scholarship databases with an offer to help them put their database up on the web and to add a link to their web site from the front door of the FinAid site, for free, if they would agree to make their database available for free on the web.
The self-service nature of the web site would enable them to serve many more students, and the greater traffic would make the web site attractive to advertisers. Students could get their scholarship matches in less than an hour instead of weeks, and they could use tools provided by the site to manage their matches.
The profile data also would permit more effective targeting of advertisements so that students would see only advertisements of interest to them, in effect making the advertisements part of the site content. The advertising revenue eventually would exceed the fee revenue they were collecting from students and would permit improvements in the size and quality of the database. I demonstrated a small online scholarship database I had implemented to illustrate how this might work.
At the time, only one company—the predecessor of FastWeb—took me up on the offer.
But one was enough.
It was and remains very difficult for paid services to compete with a free service. A year later, several other scholarship databases took me up on my offer and became available online for free. With several high-quality scholarship databases available online for free, there was no going back to a paid service.