According to experts, colleges are progressively spending more to entice wealthy students with scholarships based entirely on academic or other achievements. And it's leaving people who need it the most with fewer options for financing their education.
According to a 2019 report on non-federal aid by the National Center for Education Statistics, students in the highest 25 percent income range received more non-federal financial aid ($11,300) on average than students in all other income levels, including those in the lowest 25 percent income range ($7,500).
Here's why universities give wealthy students more aid and how students with financial needss can make the most of their options.
The Washington Post published an article by Stephen Burd on his report on financial help at 339 schools.
Private and public institutions are adopting a "high tuition, high assistance" strategy to compete with one another, according to Stephen Burd, senior writer and editor of higher education at New America, a nonprofit, nonpartisan think tank.
Private universities are known for their high expenses, but public colleges are increasingly joining the game by hiking costs and attempting to recruit out-of-state students who pay more to attend.
He continues, "It is derailing public higher education and undermining why we have a public higher education system in the first place."
Colleges need wealthier understudies
According to experts, affluent students receive more school help than students in financial need because institutions aggressively pursue them. Schools are providing non-need-based merit aid to attract wealthy students, particularly those who are high-achieving.
“Better prepared students, higher graduation rates, and a better possibility of recruiting students who would eventually contribute back to the college – that is the reward system in place,” Van Der Werf adds, noting that there is no such reward system for assisting low-income students.
Colleges prefer students who will help them improve their rankings, and wealthy students frequently have attributes that meet the criteria.
Rankings are always based in part on performance metrics: for example, U.S. News & World Report's annual rankings consider academic accomplishment and high SAT scores. According to a Brookings Institution analysis of SAT data, wealthier students perform better on them.
College completion is another component in rankings; according to national data, students from low-income schools are slightly less likely to graduate than students from high-income schools.
Schools are competing
Private and public institutions are adopting a "high tuition, high assistance" strategy to compete with one another, according to Stephen Burd, senior writer and editor of higher education at New America, a nonprofit, nonpartisan think tank.
Private universities are known for their high expenses, but public colleges are increasingly joining the game by hiking costs and attempting to recruit out-of-state students who pay more to attend.
He continues, "It is derailing public higher education and undermining why we have a public higher education system in the first place."
Money related help budgets are constrained
Families rely on financial aid to help pay for college – according to Sallie Mae's most recent "How America Pays for College" report, financial aid such as scholarships and grants covers around one-quarter of college costs.
However, when it comes to a college's financial aid budget, there is only so much money to go around, and schools must make decisions about how that money is spent.
According to a 2020 New America analysis that analyses financial help at 339 institutions, non-need aid, or merit aid, increased by 37% between 2014 and 2017, compared to need-based aid, which increased by 21%. During this time, these schools increased their non-need aid from $2.2 billion to nearly $3 billion.
According to Robert Kelchen, associate professor of higher education at Seton Hall University in South Orange, New Jersey, some universities are attempting to give as much as they can to students, particularly Pell Grant recipients.
However, he cautions, this does not guarantee that students will receive the full amount of financial help for which they are eligible; universities will only give what they budget for.
How to urge more help for college
Even if all institutions make a major reform to boost need-based aid, low-income students can still take advantage of the financial aid that is available. Here's how to do it.
• Because most aid is awarded on a first-come, first-served basis, submit the FAFSA as soon as feasible before the start date (Oct. 1 each year). If your college requires it, fill out the CSS Profile as well.
• Accept any Pell Grant and work-study money that comes your way.
• Seek out scholarships, some of which are based on financial need. Try the Scholarships Search Tool from the US Department of Labor.
• If you need a loan, borrow so that your monthly payments in your first year out of school are no more than 10% of your estimated after-tax monthly income. Take out federally subsidised student loans first.
• If your financial position has changed since you filed the FAFSA, contact your college to request additional financial help.
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