Archive for January 24th, 2013

January 24, 2013

College presidents want to reduce merit aid

by Grace

Apparently college presidents are unhappy about the trend of awarding increasingly more financial aid based on merit and not on need, so they are taking steps to reverse the trend.

The shifts in aid in the last 15-20 years have been unmistakable. In 1995-96, private nonprofit and public four-year colleges were far likelier to give need-based grants than merit-based ones (by margins of 43 vs. 24 percent at private nonprofit colleges and 13 percent vs. 8 percent at public universities). In 2007-8, 18 percent of public university students received merit-based awards and 16 percent received need-based grants; at private colleges, 42 percent received merit aid and 44 percent received need-based assistance, a 2011 study by the National Center for Education Statistics showed.

College presidents believe the trend has ‘undermined’ the concept of making college affordable.

There is fairly widespread agreement that the rapid expansion of financial aid awarded based not on financial need but on academic (as well as athletic and racial/ethnic) grounds, and frequently to attract students who are able to afford tuition but whose families won’t pay full freight, has undermined the traditional conception of financial aid as a tool to make college possible for students who couldn’t otherwise afford it. Aid awarded based on criteria other than need tends to change where people go to college, not make it possible for them to go.

I doubt that the increase in merit aid has been an important factor in making college less affordable.  College presidents consider this an issue of fairness, but perhaps it’s more a matter of concern about being forced to engage in bidding wars for students.

If Nugent spoke with a hint of frustration in her voice, it was because she so clearly thinks that most presidents know in their hearts that what they’re doing isn’t in the long-term interests of their institutions or of students.

“The merit wars are both wrong and destructive; is a game of chicken the most responsible way to manage our institutions?” she said. “There’s an understandable fear of unilateral disarmament. The question is, can we band together to defend what we think is right?”

S. Georgia Nugent, president of Kenyon College, leads an effort to cut merit aid.  In her presentation at a recent meeting of presidents in the Council of Independent Colleges, she shared news about efforts being made to reach that goal while also ensuring the Department of Justice does not once again investigate the schools for the possibility of collusion

First, Nugent shared with the group a preliminary “statement of principle” (drafted by John McCardell of the University of the South and others) that would represent a “first, baby step” toward reaching some kind of agreement among presidents about eventual actions or changes in financial aid and pricing practices.

And then David L. Warren, president of the National Association of Independent Colleges and Universities, told the group that he’d had a series of preliminary conversations in which officials of the U.S. Justice Department had expressed a willingness to review (and potentially bless) accords in which colleges would agree to take common steps to reduce non-need-based aid that would result either in increased financial aid for students or lowered tuition prices (or both).

The importance of receiving DOJ blessing arises from “a Justice Department antitrust investigation in the late 1980s that brought to an end the practice in which elite institutions'”collaborated on financial aid distribution, a practice the DOJ alleged “was anti-competitive and hurt students”.

Among the principles in the document circulated among the college presidents group was this one:

We will cease, in our publication, on our websites, and in all other forms of admission communication, to use the term “merit aid” to describe non-need-based financial aid (since, they say, all aid recipients are meritorious).

Hmm, “all aid recipients are meritorious” reminds me of the situation where all members of all teams in the soccer league receive trophies.  All those soccer players are also meritorious.

The session included several indications that the outlook for reducing merit aid was positive, leaving the audience of college presidents in an “upbeat mood”.


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