The intersection of technology, research, financial aid and student access in higher education

The missed argument in merit- and need-based institutional aid

Added on by Scott Cline.

From Sunday’s NY Times “Freebies for the Rich”:

Raising the tuition and then offering a 25 percent scholarship to four wealthier kids who might otherwise have gone to private school generates more revenue than giving a free ride to one who truly needs it.

The problem with this sentence and nearly every time this argument is made is the author forgets to insert the line “…school generates more revenue to provide a free ride to one who truly needs it.”

For some reason the argument over merit- versus need-based hinges on zero-sum game, instead of seeing it as a pie enlarging equation.[1]

Every college or university with enough level of equity, mission and values would have a school full of talented low-income students, but unless the federal government, state government, endowment or other revenue producing source is paying for it, it is simply not possible.[2]

As state governments continue to reduce educational funding, institutions have been forced to find those offset revenues to pay for the low-income students.

Make no doubt about it, this trend is a reaction to those reductions and this reaction has both intended and unintended consequences.

  1. Yes, there are many nuances to this, especially in the area of public universities with fixed enrollment numbers, but stick with me for a few seconds.  ↩

  2. One of the most recent stories about other revenue producing sources failing a school is Cooper Union, which until this school year, was 100% tuition free.  ↩