Imagine the scene. An upper-middle-class family, the mother a doctor, the father a lawyer, sitting at the kitchen table with their college-bound daughter. A fat envelope lies before them. They do not yet know that it conceals more than their daughter had hoped for. She has been awarded a $4,500 merit scholarship, $18,000 over four years. Wow! They didn't even apply for aid. They don't need it. Their daughter is just getting the recognition she deserves.
This scene is being repeated across the nation. A small proportion of these families are African-American; most are white. What is really happening here, and why is it wrong?
Unlike past merit aid - which was awarded for extraordinary prowess in academics, the arts, or athletics - the new "merit" aid is simply a discount to entice parents of means to enroll a son or daughter at a particular college. For many decades, tax-deductible gifts for need-based scholarships enabled the nation's most selective colleges and universities to create opportunities for the percolation of merit throughout our society. Students of all races and ethnicities - from lower and mid-level income families - achieved the elite education that positioned them for leadership. Opera star Jessye Norman and scholars Henry Louis Gates Jr. and Cornel West were scholarship students, among thousands of other African-Americans successful in business and the professions. Society has benefited from the contributions of scholarship students' achievements, and from the witness each student is to American ideals of justice and opportunity made real. Through the 1980s, two trends appeared. The cost of higher education continued to climb, and a generalized resistance to income redistribution grew. Many expensive colleges found fewer families willing or able to pay tuition. Colleges had to meet budgetary, enrollment, diversity, and cost-reduction goals. Part of the solution was turning need-based financial aid into so-called "merit" awards. The $540,000 dividend Simple mathematics shows these awards are smart business. An investment of $27,000 a year pulls in $135,000 a year or $540,000 over four years. Here's how: * The same $27,000 that used to meet a year's tuition, room, and board for one full-need student now becomes six $4,500 "merit" scholarships. These flatter and bring in six students who can afford to pay the remaining cost of $22,500 each, totaling $135,000. * By contrast, a $27,000 full-need scholarship to one full-need student costs the college $27,000 a year or $108,000 over four years. * In dollar terms, the no-need students given "merit" aid turn what would have been a loss into a productive investment. The merit approach helps the college meet (a) budget goals, (b) enrollment goals, filling six beds instead of one, (c) diversity goals if it selects students of color for merit aid, and (d) cost reduction goals, since no-need students are statistically less likely to drop out, more likely than high-need students to graduate on time, and less likely to cost the college's budget the counseling services needed to help students adjust to college. …