Our view on scholarships: Focus college aid on need
The University of Colorado at Boulder is a prestigious research university located in a picturesque setting. Its graduate schools consistently rank in the nation’s top 10.
Considering all that, the university gets less respect from state politicians than it deserves. On lists ranking public universities by funding they receive from their state, Colorado rests near the bottom.
On the surface, then, it would be easy to take the university’s side in its money struggles with the governor and Legislature. Except for one thing: If the school is so pinched for dollars, why does it hand out a quarter of its aid to students who don’t need it?
Boulder is one of scores of public universities that dole out taxpayer-financed “merit aid” to students whose families can afford the tuition there. A 2006 College Board study concluded that the practice is both widespread and significant. Admissions directors use those dollars to attract exceptionally bright students or unusually talented athletes who make the university look more prestigious or attractive.
In flush economic times, such expenditures might be excusable. But today’s tough times raise questions about giving away so much public money in the pursuit of higher rankings.
In competing with private colleges, public universities already have a substantial built-in cost advantage from state subsidies — an advantage that averages $7,072 a year for out-of-state students and $17,527 for in-state students.
To be sure, higher education costs have gotten onerous for all but the very wealthy, and even state-school tuitions are a strain on middle-class budgets. But boosting merit aid to non-needy students hurts poor students the most by siphoning away money that would otherwise be available to them.
As it is, middle- and upper-income undergraduates receive larger grants from institutions than do students from low-income families, according to the National Center for Public Policy and Higher Education, a non-profit organization that examines college costs and access. The average institutional award is $4,700 for students with parental income below $20,000 a year and $6,200 for those with parental income above $100,000.
Some states lacking prestigious public universities hand out merit assistance to retain in-state students with good grades, the very students most at risk of leaving the state — the “brain drain” dilemma. But states such as California that built high-quality public schools, UCLA or Berkeley, don’t have to offer merit aid to attract students. Unfortunately, many states see doling out merit money as cheaper than building first-rate universities.
The best way to improve quality is to raise the standards for admission, and then direct financial aid to those who meet those standards but couldn’t otherwise afford to attend.