GAME OF THRONES: The New America Foundation’s Stephen Burd finds that a good number of private universities are supporting wealthier students through merit-based scholarships while lower-income students are saddled with sticker-price tuition:
“...there is compelling evidence to suggest that many schools are engaged in an elaborate shell game: using Pell Grants to supplant institutional aid they would have provided to financially needy students otherwise, and then shifting these funds to help recruit wealthier students.”
The “enrollment strategy” is fair game for private institutions. It’s the loose definition of “merit” that suggests foul play -- an institutional shift from providing access to enrolling more affluent students -- may be involved.
“According to the NCES report, 19 percent of freshmen at four-year colleges who had SAT scores ranging from 0 to 699 received merit awards from their schools or states, as did 27 percent of those with scores from 700 to 999. In addition, 20 percent of those who had grade point averages of less than 2.0 received this assistance as well.”
Burd’s case is compelling though the issue is complex. (The Atlantic’s Jordan Weismann provides a more complete summary here.) Many schools implementing these strategies have thin endowments. Sixty percent of the nonprofit, private colleges from the NCES data with tell-tale “shell-game” numbers (>25% Pell grants and >$15K net price for lowest-income students) have endowments less than $50M (by contrast Harvard has $30B). The move appears to be less malicious and more about survival in many cases.
The ed policy folks at New America Foundation recommend a federal solution of Pell grant matching and bonus programs that steer enrollment priorities back towards lower-income students. We’re guessing that MOOC providers and other HigherEdTech companies are looking forward to their day in the sun. As the debate over quality and efficacy of online courses rages onward, it appears that cost-effectiveness and access will ultimately still the show.