College & Workforce Readiness

Growth in Merit-Based College Financial Aid Chronicled

By Caralee J. Adams — October 19, 2011 1 min read
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Although colleges and universities give most of their aid to need-based students, a growing proportion is being awarded to students based on academic achievement without regard to finances, according to a report released Tuesday.

The National Center for Education Statistics examined trends in merit aid for college undergraduates from 1995-1996 and 2007-08.

Here are the key findings from the report:

In 2007-08, about 14 percent of undergraduates received merit aid ($4,700 on average) compared with 6 percent in 1995-96 (average of $4,000 in constant 2007 dollars).

The proportion of students receiving need-based aid was larger in 2007-08 (37 percent) than in 1995-96 (32 percent). The average amount in 2007-08 was $4,000, up from $3,600 in constant 2007 dollars in 1995-96 ($3,600).

In 1995-96, need-based institutional grants were more common (43 percent) than merit-based grants (24 percent ) at private, nonprofit institutions and at public four-year institutions (13 percent vs. 8 percent). In 2007-08, the proportion of merit-aid recipients was 42 percent compared with 44 percent of need-based grant recipients at private, nonprofit four-year institutions and the proportion was 16 percent vs. 18 percent at public institutions.

In the Southeast, 24 percent of college students were state merit-scholarship recipients while the national average was 10 percent.

This information comes on the heels of a report by the Education Trust this summer that revealed the inequity in the way financial aid is distributed and how private, nonprofit colleges and universities spent almost twice as much on students from families in the top quintile of family income as they did on those in the bottom quintile.

A version of this news article first appeared in the College Bound blog.