Though Congress recently passed large increases in the maximum Pell Grant award, which goes to neediest students, merit aid--which often goes to wealthier students--remains popular on many college campuses. Higher Ed Watch's Lindsey Luebchow looks at schools using merit aid to see if federal increases in need-based aid might also lead to an explosion in merit aid for wealthier students.
By Lindsey Luebchow
Higher Ed Watch
Last week, Congress approved legislation that would transfer more than $20 billion over the next five years from over-subsidized banks to need-based student financial aid. The primary beneficiaries of the legislation are low- and middle-income students whose abilities to enroll in and complete college are restricted by balooning tuition costs. But this infusion of federal need-based aid could have a major unintended effect: colleges and states might shift more of their own resources towards "merit"-based aid.
While the federal government is dedicating its money to increasing need-based college access programs like the Pell Grant and making college more affordable, many universities and states continue to use their funds for a different purpose. Instead of giving students financial support based on need, they are doling out money based on grades irrespective of financial need (i.e. merit-based aid). In other words, colleges are subsidizing the education of affluent students who would have attended college without the extra financial aid—specifically to raise the college's ranking in the U.S. News & World Report’s "America’s Best Colleges" issue and to attract students with parents wealthy enough to afford to pick up the rest of the tab.
Judging by data included in the latest U.S. News rankings report, merit-based aid remains as strong as ever. And we at Higher Ed Watch are concerned that the infusion of federal funding could lead to a merit aid explosion.
To read more, please visit our site, HigherEdWatch.org