Rich kids win in the fight for college aid

By Laura Van De Pette
February 2, 2006

Every year Cabrini’s tuition increases causing low-income students to fret. The tuition at Cabrini has increased 32.7 percent over the past five years while the national average among private colleges shows an increase of 22.2 percent. With an increase of nearly eight percent between last year and this year, low-income students have good reason to worry.

Not only is the tuition increasing but colleges like Cabrini and thousands of other colleges are trying to attract wealthier students to their campus by giving them increased amounts of merit-based aid. A trend shows that in recent years, many colleges and universities, particularly private institutions, have been giving more and more aid to their wealthiest undergraduates, students who wouldn’t qualify for aid under most need-based formulas. Why? Because even after taking into account the cost of the aid, these students still provide institutions with far more net revenue than their low-income peers.

Mark Osborn, the Vice President for Enrollment Management, said, “There is no question or doubt that there is a direct correlation between the income of a family and the academic achievement of the prospective student. Nine times out of ten, as family income rises the more qualified the student is, and colleges in general, not just Cabrini, are seeking to enroll more qualified students.”

According to the National Postsecondary Student Aid Survey, private institutions gave financial aid to 53 percent of students in the lowest income quartile in 1993. That number has held steady, rising only 3 percentage points to 56 percent in 2000. But for students in the highest quartile, the percent receiving aid jumped by 16 percentage points, from 35 percent to 51 percent.

Furthermore the amount of money received by high-income students rose faster as well. In 1992, low and high-income students received the same average award, roughly $5,500. But by 2000, awards jumped by $1,300 for students in the highest income quartile, compared to only $700 for students in the lowest, according to the National Postsecondary Student Aid Survey.

“Cabrini tries to really disperse aid evenly to students of merit and need to achieve a balanced class. We raised our academic quality and expectations last year as a means to build our academic profile. To build our profile and better the college’s academic standing the college uses merit-based aid to attract more academically qualified students who may not have displayed financial need,” Osborn said.

“More recent data suggest that the trend isn’t letting up. The amount of so-called “merit” aid awarded to students increased five-fold from 1994 to 2004, more than four times the rate of increase for need-based aid,” according to the National Postsecondary Student Aid Survey.

What is even more disturbing than this unstoppable trend is the ruthless force that drives it. Low-income students bring in far less net revenue than rich ones, and do nothing to polish an institution’s status in the higher education marketplace. College education has become a strictly money-making business that strives only to better the college’s status and standings in the influential U.S. News and Princeton Review rankings by using aid dollars to entice wealthy students who ultimately pay more to attend and in the long run will better the image and standing of the college.

Kevin Carey, an education analyst, said, “I worry that some institutions had become dependent on using merit-aid grants as they engaged in bidding wars for affluent, high-achieving students whose presence raises colleges’ standing in popular magazine rankings. By doing this, colleges are failing to use their financial-aid resources in ways that would maximize access for low-income students,” as reported in the Chronicle for Higher Education.

Many students worry that shifting the student aid focus away from low-income students puts them at risk of being pushed out of elite institutions and out of the four-year higher education sector as a whole. ( It would be great if we could find a way to make a side bar near this graf that directs the reader to Brittney’s story about 4 yr colleges vs. 2 yr colleges.)

Megan O’Brien, a junior elementary education major, said, “I am feeling the effects of the tuition increase in my wallet and it makes me sick to think that because my parents did not know how to bargain with the admissions counselors that I received less aid than a wealthy student who’s parents knew exactly how to hustle more merit-based aid out of the college. I never thought of college as a business but clearly here we have colleges wanting to better themselves and doing so by appealing to and targeting the wealthy students.”

Other factors are also making it harder for those with less money to attend college. Measures designed to make college more affordable, such as tuition tax breaks and merit-based aid, provide a disproportionately high benefit to families who make over $50,000 a year. This wealthy group received 43 percent of education tax credits and 70 percent of the benefits of federal tuition tax deductions in 2003.

At a College Board news conference last week, many higher-education officials criticized institutions that offer merit-based aid because, they said, the incentive tends to benefit students who would make it through college anyway.

“By essentially paying smart students to attend a particular college, those institutions waste money that could be used to help students who really need it,” said Amy Gutmann, president of the University of Pennsylvania, as reported in the Chronicle.

According to the Chronicle, William E. Kirwan, chancellor of the University System of Maryland, agreed. “We have reached an indefensible point where a low-income, high-ability student is no more likely to attend college than a low-ability, high-income student,” he said. “Institutions need to get their houses in order.”

“When did colleges start discounting poorer students and favoring the wealthy all in the name sake of image and high-profile magazine rankings? I thought aid was given to help needy students obtain a college degree not given to the wealthy to help the college move up in rank,” said O’Brien.

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Laura Van De Pette

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