The Coming Crisis of College Access Unfolds

January 13, 2012

“There is a group of students who enter college with such dire financial need that the amount the federal government expects their families to contribute to college is effectively zero. In Wisconsin, that zero-pay population has grown by half in a single year: from 42,641 students in the 2008-09 academic year to 65,800 in 2009-10.”

That’s from Daniel DeVise’s College Inc. blog this past Wednesday.  He’s reporting on data shared at the recent Council of Independent College‘s President’s Institute by Rolf Wegenke, president of the Wisconsin Association of Independent Colleges and Universities.  DeVise adds, that these data surely “mirror a national trend.”  Indeed.

This is a scary glimpse into one of the vectors of the unfolding crisis of access to a college education.  Increasingly, the college-age population is coming from families of low and modest incomes.  That increases the need for financial aid.  That’s what Wegenke is showing us.

A second vector is that state governments are decreasing their support of higher education.  They are providing less direct support to public institutions, and also cutting their support of financial aid for lower-income students.  One consequence is that public institutions are hiking their tuition charges to make up for the lost state support.  That means lower income students need even more financial aid if they are to attend.

And there’s a third vector.  DeVise says “Colleges are diverting much more aid money to needy students because many more students are in need,” but I think he’s simply wrong in saying that.  A recent report from the National Center for Educational Statistics shows that colleges and universities are shifting increasingly from need-based to “merit-based” aid.  According to an Inside Higher Ed summary of the NCES report, “In 1995–96, need-based institutional grants were more common than merit-based grants in both private nonprofit (43 percent vs. 24 per-cent) and public 4-year institutions (13 percent vs. 8 percent) (figure 4). In 2007–08, the proportion of merit aid recipients exceeded that of need-based grant recipients at public institutions (18 percent vs. 16 percent) and was not measurably different at private nonprofit 4-year institutions (42 percent vs. 44 per-cent).”

I put “merit aid” in quotation marks because a good deal of aid that is awarded on the basis of “merit” turns out to go to students with quite average grades, SAT scores or other credentials.  Those students should go to college, sure.  But colleges are giving them aid because their parents have higher incomes.  Colleges and universities are using “merit aid” to attract a greater share of students from those higher income families, and are prepared to take a little less in tuition from those families to get them to pay the rest.  Students from lower-income families, these colleges are saying in effect, can go somewhere else.

So that’s the third vector: colleges are diverting aid away from need and deploying their aid resources tactically to capture (lower) tuition payments from higher income families.  Just when we need more need-based aid, the need-based aid dollars are being used to subsidize more affluent students.

Oh, and we shouldn’t forget the mounting sums of student aid debt.  That’s a fourth vector.

The crisis of college affordability mess is only going to get worse.  Wegenke (and DeVise) have lifted a corner of the rug.

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About Doug Bennett

Doug Bennett is Emeritus President and Professor of Politics at Earlham College. He has a wife, Ellen, and two sons, Tommy (born 1984) and Robbie (born 2003).
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2 Responses to The Coming Crisis of College Access Unfolds

  1. Arleen says:

    Professor Bennett, I think that when we see what has happened since 2008 we will see where the need based aid is gaining on, and maybe surpassing, merit aid. I’m not going to chalk it all up to generosity and altruism, it may be that the same students are getting aid but now that they have need, it can be called need-based as opposed to when they arrived and they didn’t have need. We are seeing significant numbers of student who entered with quite high expected family contributions (so aid may not have been called “need based”) but now have a 0 EFC so the same aid they received when first enrolling can (and will) now be classified as need based. I like your posts! Thank you

    • Doug Bennett says:

      You may be right, but I have my doubts. It may depend on the college. Dan deVise asked the same thing: “If it were possible to plot merit and need aid on separate charts (I gather it is not), do you think that one would point up and the other would point down? I suspect most of your colleagues would say that both are rising, right?” And I responded:

      They might say that, but an honest answer would be hard to come by, even if we were all trying to tell the truth. Some merit aid winds up being need-based aid: that is, it would be awarded even if a college gave up all merit aid and only awarded need-based aid.

      One day at Earlham, I set how to see what the ‘true’ balance was between the need-based and the merit-based aid we were giving. It turned out to be virtually impossible, because the software we use (and I suspect this is true of most such packages) loads in the merit aid first, and then loads in need-based aid up to the amount of total aid we want to award based on need-based principles. But the merit-aid remains labelled thus. So how much of the merit aid is really need-based only given under a different label? It was too hard to tell. Put another way, we’re starting to confuse ourselves, so complex has the financial aid situation become.

      Certainly the overall discount rate is rising nearly everywhere, and has been for some years. And at many colleges the Pell percentage is slowly rising, even if many colleges don’t want that to happen.

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