A group of private college leaders are calling for a cease fire in the institutional financial aid arms war. S. Georgia Nugent, the president of Kenyon College, is spearheading a movement to try to get her fellow college presidents to agree to recommit themselves to providing need-based financial aid, rather than merit scholarships and tuition discounts. This is an extremely admirable effort but unfortunately -- as Kenyon College’s own experience shows -- it’s unlikely to have much of an impact.
As Higher Ed Watch has previously reported, public and private four-year colleges are increasingly spending their institutional aid dollars on trying to attract the students they desire than on meeting the financial need of the low- and moderate-income students they enroll. A 2011 report from the U.S. Department of Education’s National Center for Education Statistics shows just how dramatically colleges have changed the way that they spend their institutional aid dollars over the past two decades.
The report found that in the 1995-96 school year, both public and private four-year colleges and universities primarily used institutional aid to try and meet the financial need of their students:
- At public colleges, 8 percent of first-time, full-time students received merit aid, while 11 percent received need-based aid
- At private colleges, 24 percent received merit aid, while 43 percent obtained need-based aid
But by 2007-08, merit aid trumped need-based aid at both types of institutions:
- At public colleges, 18 percent of first-time, full-time students received merit aid, while 16 percent received need-based aid
- At private colleges, 44 percent received merit aid, while 42 percent obtained need-based aid.
Clearly many of these schools are leveraging their financial aid budgets to buy students who could already afford to attend without the help. In many cases, these institutions are trying to lure in top students who will help them improve their standing in the U.S. News & World Report’s college rankings so that they can enhance their reputations and marketability.