No Merit in These Scholarships

Iwas a scholarship student at Williams College in the late 1950s, and fortunate to be one. Yes, I had the academic record to get in, but I would never have been able to go to such an expensive place without the generosity of alumni and other benefactors who believed in helping the less fortunate. Aid based only on merit was unknown at Williams; every kid I knew with a scholarship needed it.

That's no longer the case at many American colleges and universities. Over the last few decades, an increasing number have been offering significant aid based only on merit, without regard to a family's resources. In pursuit of class averages that will support a strong national ranking, these schools are essentially buying better students.

As a trustee at several institutions of higher education, I watched this development with dismay. To my mind, merit-based aid betrays the original goal of helping worthy but disadvantaged students; it spends donors' money in a way they may not intend, and it invests college resources in short-term promotional advantage instead of lasting improvements of substance.

While such elite institutions as Williams (where I was a trustee for 18 years), Harvard and Stanford have sufficient status to limit financial aid to those with need, the merit-based trend among most schools is well documented. "In the 1970s and 1980s, most aid programs were designed to increase access to college for students who would otherwise be unable to afford to enroll," said a College Board report, "Trends in Student Aid 2004." "In recent years, student aid programs have been focused increasingly on affecting students' choice of institutions, on rewarding academic achievement and on reducing the financial strain on middle-income families."

"Need" can be an elusive concept, since a $40,000-a-year college bill will give pause to even well-off families. It may help to picture a situation like this: Two young women apply to a good private college. Both are well qualified. One, whose blue-collar parents have a combined income of $68,000, has solid grades and SAT scores smack in the middle of the applicant group. The other, first in her high school class, has nearly perfect SATs -- as well as extremely wealthy parents. The school accepts both students, but offers only the second girl financial aid, because it wants her impressive statistics to boost the freshman class average. The other student? She is offered a little need-based aid, say a federal Pell grant, and is forced to go to a less expensive school.

My old pal Bart Giamatti, the former Yale president and Major League Baseball commissioner, often ranted against this trend, and we agreed we would fight so-called merit aid at every opportunity. I tried to do so at Fairfield University, the Jesuit institution in Connecticut where I was a trustee for the past 15 years. And while I was able to persuade some fellow trustees of the fallacy of giving funds badly needed by low-income students to students from wealthy families, I ultimately lost the debate. Unlike Williams, Fairfield does award merit scholarships: The administration is convinced many of the top students it buys with cash would not otherwise come to the school. In a perfect world we wouldn't allocate resources this way, they say, but in the highly competitive arena of higher education, we have no choice.

What's really wrong with this situation? you might ask. Why should anyone be either surprised or offended by this obvious market-oriented response to attracting better students?

There are many reasons, but the first that comes to mind is one of fairness. The original goal of financial aid was to level the playing field for students with the ability but not the means to pursue higher education. But the very board scores that help to trigger today's merit awards are partly generated by income. So the high-income student is twice privileged -- once in affording the better schools or special tutoring that help get the high scores, and then in getting a financial award.

It is easy to see how the merit aid idea gained strength. A major influence has been the appreciable clout of the annual college and university rankings done by U.S. News & World Report. Virtually everyone in higher education criticizes these rankings -- "meaningless," "trivial," "superficial" -- but nevertheless pays attention to them. Fairfield has a good ranking in its category of "Regional Small Comprehensive Universities" and wants to maintain that status. So, every year, Fairfield awards aid to about 18 percent of the freshman class on a purely merit basis, before any financial aid forms are completed. Once that financial information arrives, it usually turns out that about half of the recipients don't need the money, but they get it anyway.

Other private schools are making similar decisions. In its 2004 report, the College Board noted that merit-based aid at such schools constituted 27 percent of total institutional grant aid in 1992, 30 percent in 1995 and 36 percent in 1999. Even when grants are nominally based on need, merit plays a role: Morton Shapiro, president of Williams, and Michael McPherson, former president of Macalester College, recently published a study showing that when qualified students have identical needs, those with higher board scores will often get more money.

The trend also affects public colleges and universities, where the percentage of merit-based financial aid is already higher than at private institutions -- 51 percent of total institutional grant aid in 1992, 40 percent in 1995 and 43 percent in 1999. For many of these schools, one problem is brain drain. They offer grants, scholarships and sometimes completely free tuition to any in-state student with an average above 3.0, say, or in the top 5 or 10 percent of their graduating high school class. The idea is to keep bright kids from Georgia in Georgia, or those from Connecticut in Connecticut. The impact is similar to that in private schools: Money goes to families who may not need it as much as others.

I have challenged leaders of several colleges on this subject, and I hear similar arguments. "We agree it is objectionable in principle, but everyone else is doing it and we have to compete." "It works, and we get a much better class." "If we drop it and lose rank with U.S. News & World Report, we will have gained little and lost a lot." Last year, I was told of a very able young graduate of a small prep school in Connecticut -- where, as it happens, I have also been a trustee. Her father, a successful surgeon, was able and willing to fund her college education. But a large merit aid package from Fairfield was enough to persuade her to turn down Boston College.