With state dollars for higher education drying up and institutions competing for high-achieving students, new research finds public colleges and universities are increasingly using merit aid to attract out-of-state students who pay more in tuition and can boost the school’s profile.
New America’s Stephen Burd reports in “The Out-of-State Student Arms Race: How Public Universities Use Merit Aid to Recruit Nonresident Students,” that half of public colleges and universities give merit aid to at least 10 percent of non-needy freshman and nearly 1 in 5 provide this aid to 20 percent or more of their incoming students without financial need.
In his analysis released May 18 for the Education Policy Program at the Washington-based research organization, Burd examined 424 public colleges and universities using information from the Common Data Set. He found the “alarming” trend, which means less aid for low-income and minority students, has become widespread and is not limited to big-name, flagship instituions.
Burd discovered that public colleges that provide substantial amounts of merit aid to students tend to enroll more out-of-state students than those that provide little of this aid. Also, those that give more merit have had a larger drop in the enrollment of in-state freshmen since 2000.
Institutions are scrambling to make up for lost public funding in recent years and are relying increasingly on tuition revenue. State investment in higher education is down 13.3 percent compared to five years ago and 24 percent compared to 25 years ago, according to the State Education Executive Officer association.
“Stung by sharp state budget cuts at the same they are seeking greater prestige, these universities are increasingly pitted against one another, fiercely completing for students that they most desire: the best and the brightest and those wealthy enough to pay full freight,” writes Burd. “And they are using a large share of their institutional aid dollars—money that would be going to students who truly need itto entice these generally privileged students to their schools.”
Burd concludes it would be a “national tragedy” if some public institutions move away from their mission of providing support to low-income and working-class students with the most financial need in pursuit of those who can pay the most.
The New York Times recently devised an index to publicize colleges that admit the most students from low-income backgrounds, but its College Access Index is dominated by private colleges.
A version of this news article first appeared in the College Bound blog.