AT&T is running a great deal for Valentine’s Day.
Buy one Apple Watch before Sunday and you can get a second one free. Maybe if the cellphone carrier thought more like a university, they’d call it their Presidential Time-Telling Scholarship.
We don’t talk about it this way too often, but most “merit aid” is really better described as a coupon. (Buy one semester, get the second half off.) Colleges use that type of discounting as an incentive to get families to enroll. It’s been a long-standing feature of private colleges’ “high-cost, high-aid” pricing model.
New America released a report
this week analyzing how that same strategy has taken over public colleges. The report’s subhead doesn’t mince words: “How Enrollment Management and the Merit-Aid Arms Race Are Derailing Public Higher Education.”
Stephen Burd, a senior writer at New America, has been tackling this topic for years, first with a series of reports called “Undermining Pell.
” This latest one looks at how merit aid shifted at 339 public universities between 2001 and 2017:
- More than half of the schools doubled the amount they spent on non-need-based aid, after adjusting for inflation.
- Public flagships get a lot of attention but regional state colleges are also devoting an even larger share of their institutional aid to non-needy students.
- And remember, it’s not like this is extra money colleges are spending on non-needy students after they’ve taken care of the bills for all the others. Overall, the colleges in the New America report are now covering 66 percent of students’ financial need, on average. Back in 2001, nearly a quarter of the colleges in the study met 85 percent of financial need. Now, just 8 percent cover that much.
But not everyone is doing it. Just as notable are the few states, including some with outstanding higher-ed systems, that don’t play this merit-aid game.
- The 11 North Carolina public universities in the report, for instance, spend just 1 percent of their institutional aid dollars on non-needy students. California’s universities, likewise, spend 6 percent of their institutional aid that way.
- In fact, Temple University — one of the places where merit aid has exploded — now spends $80 million of its own money on non-needy students, more than all of the University of California campuses combined.
Steve (a one-time colleague of ours at The Chronicle) comes hard at the entire field of enrollment management. Its chief goal, he says, is to figure out the exact price point — and not a dollar more — that will entice different groups of students to enroll.
“Therefore, using financial aid to meet students’ full need is considered wasteful and inefficient.”
The enrollment managers, of course, are looking out for the financial health of their institutions. Steve acknowledges their argument that this type of financial-aid leveraging helps colleges’ bottom lines and that, in turn, lets them spend more money on need-based financial aid. He just hasn’t seen any evidence that’s really the case.
Instead, he argues, the incentives have to be changed, and that will require federal intervention. Ultimately, in a system of coupons and discounts who will look out for poor students?
(P.S. The burger-stand photo is from Silay City in the Philippines. Started in 1997, Angel’s Burgers now has 1,300 branches and kiosks around the country. The key to its growth, says the couple who founded it, has always been the buy-one, take-one deal.)