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
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
* 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. …