Public Colleges Are Using Merit-Based Aid to Recruit High-Paying, High-Performing Students
Posted By Eliana Osborn on June 3, 2015 at 2:08 pm
Upper-middle class families are often frustrated by the college financial aid process. On paper, at least, they make too much money to qualify for need-based assistance. However, with ever-rising college costs, that doesn’t mean they have enough cash on hand to shell out for private or even public universities. That’s where merit-based aid comes in.
A recent study from the organization New America looks at how merit aid is used by public universities to entice students to attend. Merit aid can come in the form of scholarships, grants, teaching assistant positions, or other funding. What makes it different from other forms of financial aid is that the money is handed out based on academic excellence, rather than need. However, the line between need and merit isn’t always so clear, and over the past several years, colleges have focused more on giving low-income students priority for scarce resources. But with state budget cuts continuing and students gaining access to floods of enrollment data, among other factors, public colleges are starting to use merit aid to attract applicants who might have ignored them otherwise.
Merit aid offered by public universities generally does not cover the full cost of tuition. For an out of state student, that means he or she must still pay a substantial amount to attend the school—often more than an in-state student with no aid. That means increased cash flow for these institutions, who can enroll students who might otherwise spend their tuition dollars at private or local universities. One example, the University of Alabama, now has more out-of-state than in-state students in attendance.
The second benefit of merit aid is recruitment. Getting top students to attend your school makes you look good. According to New America’s report, 70% of public colleges and universities surveyed have at least 5% of freshmen students receiving merit-based financial help. This student population helps regional and state schools rise in rankings and gain greater national prominence.
As public institutions chase high-performing students, enticing them with higher and higher amounts of merit aid, many schools feel they have to be part of the chase. It’s turning into a sort of cycle, where money for those most in need is dropping away in order to lure a few top scholars. According to some, this use of merit aid threatens to change the very purpose of state schools, when they try to attract out-of-state students rather than serving those nearby.