As public institutions become less and less affordable for low-income students, a new report says that, as universities chase high rankings and future donors, financial aid money is too often allocated to students who don’t really need it.
“Crisis Point: How Enrollment Management and the Merit-Aid Arms Race Are Derailing Public Higher Education,” a report authored by Stephen Burd, a senior writer and editor with the education policy program at New America, reveals that public four-year universities spent at least $32 billion of their financial aid dollars on students who lack financial need.
Burd studied non-need-based aid and explored enrollment management and financial aid leveraging, and his report examines the years 2001–17. He found that approximately $2 of every $5 of financial aid at public universities went to students that the federal government deems able to afford higher education without financial aid.
The report’s author used data drawn from the Common Data Set and acquired from Peterson’s. He examined figures from 339 public universities year by year and found that since 2014, the growth in merit aid for low-need students has outpaced increases in spending on need-based aid, making it increasingly difficult for low-income and other financially disadvantaged students to attend these colleges and earn degrees.
Burd has been examining elements of this story since 2013, studying the average net price students from families earning $30,000 or less are asked to pay at both private and public institutions. In 2013, he found approximately a third of public universities were charging an average net price of over $10,000. He continued to track the data and issued three subsequent reports.
“Each [report], the share of public universities that were charging the lowest income students an average net price over $10,000 went up until the last one, when it was over 50%,” said Burd. “To me, that was a flashing red light that said, ‘There’s a problem here.’”
In 2016–17, approximately 69% of seniors graduated with an average debt load of $27,893 at schools that devoted 90% or more of their aid to low-need students.
