College taking another look at values of merit-based aid
Good grades and high test scores still matter — a lot — to many colleges as they award financial aid.
But with low-income students projected to make up an ever-larger share of the college-bound population in coming years, some schools are re-examining whether that aid, typically known as "merit aid", is the most effective use of precious institutional dollars.
George Washington University in Washington, D.C., for example, said last week that it would cut the value of its average merit scholarships by about one-third and reduce the number of recipients(接受者), pouring the savings, about $2.5 million, into need-based aid. Allegheny College in Meadville, Pa., made a similar decision three years ago.
Now, Hamilton College in Clinton, N.Y., says it will phase out merit scholarships altogether. No current merit-aid recipients will lose their scholarships, but need-based aids alone will be awarded beginning with students entering in fall 2008.
Not all colleges offer merit aid; generally, the more selective a school, the less likely it is to do so. Harvard and Princeton, for example, offer generous need-based packages, but many families who don't meet need eligibility(资格) have been willing to pay whatever they must for a big-name school.
For small regional colleges that struggle just to fill seats, merit aid can be an important revenue-builder because many recipients still pay enough tuition dollars over and above the scholarship amount to keep the institution running.
But for rankings-conscious schools in between, merit aid has served primarily as a tool to recruit top students and to improve their academic profile. "They're trying to buy students", says Skidmore College economist Sandy Baum.
Studies show merit aid also tends to benefit disproportionately students who could afford to enroll without it.
"As we look to the future, we see a more pressing need to invest in need-based aid", says Monica Inzer, dean of admission and financial aid at Hamilton, which has offered merit scholarships for 10 years. During that time, it rose in U.S. News & World Report's ranking of the best liberal arts colleges, from 25 to 17.
Merit aid, which benefited about 75 students a year, or about 4% of its student body, at a cost of about $1 million a year, "served us well", Inzer says, but "to be discounting the price for families that don't need financial aid doesn't feel right any more".
Need-based aid remains by far the largest share if all student aid, which includes state, federal and institutional grants. But merit aid, offered primarily by school and states, is growing faster, both overall and at the institutional level.
Between 1995—1996 and 2003—2004, institutional merit aid alone increased 212%, compared with 47% for need-based grants. At least 15 states also offer merit aid, typically in a bid to enroll top students in the state's public institutions.
But in recent years, a growing chorus(异口同声) of critics has begun pressuring schools to drop the practice. Recent decisions by Hamilton and others may be "a sign that people are starting to realize that there's this destructive competition going on", says Baum, co-author of a recent College Report that raises concerns about the role of institutional aid not based on need.
David Laird, president of the Minnesota Private College Council, says many of his schools would like to reduce their merit aid but fear that in doing so, they would lose top students to their competitors.
"No one can take one-sided action", says Laird, who is exploring whether to seek an exemption(豁免) from federal anti-trust laws so member colleges can discuss how they could jointly reduce merit aid. "This is a merry-go-round that's going very fast, a

A. offering students more merit-based aid
B. revising their financial aid policies
C. increasing the amount of financial aid
D. changing their admission processes