Published Online: February 9, 2000
Published in Print: February 9, 2000, as Colleges

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Merit-Award Analysis: Increasingly popular state merit-based scholarship programs widen the gap between rich and poor by wasting precious funds on students from middle- and upper-income families who could pay for college with their own money, a report by a leading higher education group says.

Such aid, which rewards achievement rather than financial need, is also unfair because it fails to note that students from poor families must overcome greater hurdles to perform well in school, according to the report released last month by the American Association of State Colleges and Universities, based in Washington.

You can read the full text of this AASCU report on student financial aid online in PDF format. (Requires Adobe Acrobat Reader.)

It is also available for free by calling the association at (202) 293-7070.

"State Student Financial Aid: Tough Choices and Trade-Offs for a New Generation" finds that despite relatively attainable eligibility standards, "all high school students do not enjoy the same probability for earning or retaining new-generation scholarships, especially those programs with grade threshold for eligibility (e.g., B average)."

Academic achievement, the report says, is directly related to personal and family measures such as parents' income and education, which in turn affect students' chances for earning scholarship awards.

The study also examines the impact of merit-based aid such as tax grants, scholarships, tax credits, and deductions.

Most of the plans were devised in the 1990s and are patterned after the Georgia Helping Outstanding Pupils Educationally, or HOPE, scholarship program, which allocates grants to high school students who graduate with at least a 3.0 grade point average.

Proponents of merit-based aid say that the programs reward hard workers, rich or poor.

"This study seems to miss an important point," said Steve Tompkins, the director of communications for Georgia HOPE. "It has brought academic achievement to the dinner tables of every Georgia family."

Mr. Tompkins added that middle-class families often cannot afford to pay for college and are entitled to assistance. Many must take out loans.

Between the 1997-98 and 1997-98 academic years, the amount of state merit-based aid jumped 21 percent, from $273 million to $329 million, reports the New York Higher Education Services Corp., a state agency that analyzes financial-aid data.

Need-based financial aid, however, continues to be the mainstay: Some $2.3 billion was allocated in 1997-98.

—Julie Blair

Vol. 19, Issue 22, Page 12

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