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No Merit

Chris Warren provides this discussion of “No Merit To These Scholarships” by Fay Vincent ’60.

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In ‘No Merit To These Scholarships’, Fay Vincent ’60 talks about the role of merit in assigning scholarship money, specifically when merit is the sole criteria. The problem he sees with this, in brief, is that the students most likely to be eligible for merit based scholarships are less likely to need them. So in a world where a college has a limited amount of money to award, the rich kids get the scholarship money and the poor kids can’t afford to go to college (or more likely go to a less expensive (and presumably lower quality) school). The college that awarded the scholarship essentially bought themselves a good student.

The problems he sees with this seem to be:

1. It’s unfair because the rich student didn’t need the aid and as a
result of getting it the poor student has a worse educational experience (because they have to go elsewhere).

2. It’s short sighted because the college spending the money on the
merit scholarship doesn’t get any long term gain from it.

3. The mid schools shouldn’t do it because if they force the top schools to get into that race then the top schools will win.

The first point is tricky. Taking the extreme case of 100% need-blind, pure-merit scholarships, the student body would certainly be higher achievers and less diverse. I suspect the loss in diversity would be cause a significant loss in quality of the educational experience. Also, as Fay points out, much of the reason behind financial aid is to provide for those who would not otherwise be able to afford it the ability to attend the institution. Morally speaking we’re on very shaky ground if we’re giving it to people who would be able to afford the tuition even with out it. However, that’s just from the perspective of the institution.

From the perspective of the student even that extreme example is not a cut-and-dried negative. If, as Fay suggest, many or all colleges are headed in that direction, then a student might perceive a gain in that situation. A fairly high achieving, middle-to-poor student applies to a number of schools. With need based aid they get some help at every school and pick the best school of the lot. With pure merit aid they get no help for the best two schools, but a full ride at the third school. That student may well be happier going to a slightly less good school for free under the pure-merit system than going to the absolute top school and graduating with $1000s in debt under the pure-need based system.

For the second point, colleges get two immediate, short term gains from ‘buying’ better students: a better ranking (in US News & World Report), and more of an atmosphere of academic achievement on the campus. Both of those short term benefits also feed into longer term and wider benefits: a better ranking means that the school attracts a better pool of applicants in the future, and an atmosphere of academic achievement improves the educational experience of all at the college. It also has the benefit that the college gets better quality (in terms of future giving potential) alumni. Purely on an investment front, buying high-achieving, rich students seems like a perfectly reasonable thing for a school to do. From the perspective of educational experience I have less information, but I suspect it would be reasonably arguable that the benefits of an atmosphere of academic achievement and the benefits of economic diversity among the student body (and other diversity, since economic status is correlated with a number of other things) are roughly on par with each other.

Fay argues that colleges are better off spending money on better faculty rather than better students. That’s probably true in most regards, but there are two problems with that. First, accounting-wise it’d be awfully hard to shift the money earmarked for student aid to faculty salary. Second, any argument against “trying to steal students from schools up the ranking ladder” applies equally to faculty.

For the third point, Fay himself points out that the top schools are already headed that way (though from a different direction – the top schools have enough money that they can simply pick whatever student body they want regardless of whether or not the students can pay, and they get enough top applicants that even with a high cut off they can control fairly well the composition of their student body). With the market already heading that way there seems to be very little reason for the mid schools not to make what gains they can while it’s still possible. I would actually expect this to be a reason for merit scholarships rather than against them.

Over all, I just can’t see merit based scholarships as the huge problem that Fay does. I certainly think that a pure-merit system would cause problems (degraded educational experience and moral failing in the short run, and over time further societal stratification by economic class), but I’ve not at all been convinced that all aid should be merit-blind. I think devoting some portion of the available money towards pure-merit aid and the other towards need-based aid benefits both the college and the student body, and that where that balance point lies will depend on the goals and values of the individual institution.

I expect we’ll end up with two main groups of schools. Those that can afford it will phase out tuition entirely and will simply decide what students that want based on whatever combination of traits they consider relevant, from SAT score to nationality to political leaning to handedness. The rest will offer some combination of pure merit aid (to try to improve the academic quality of their student body) and need based aid (to maintain the diversity of their student body). Such a system would probably end up trading off some fairness for students in need of financial assistance for fairness in rewarding students for high academic achievement. Inequities could be mitigated through various sliding scales or some sort of need-merit matrix to determine who is offered how much for what.

Finally, Fay laments that financial incentives would be used to make a student choose a particular school, but I think that battle is long lost and largely irrelevant. The simple fact that different schools have different tuitions already plays a large factor – even with need-based assistance a student might quite reasonably choose to go to a state school for $12000/year rather than Williams-with-assistance for $20000/year.

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#1 Comment By Wick Sloane On January 20, 2007 @ 12:26 pm

David — Have you invited Fay Vincent to join us here? Bet he would.

Merit Aid —

As for my own thought and action, I confine my interest in merit aid to public higher education. Via tax policy — what amounts to U.S. central planning — we the people support merit aid at privates. A donation for a scholarhip is 100% tax deductible, whether for a need-based scholarship or for a merit scholarship. Whatever the privates do is not going to make enough difference to be worth the trouble, in my opinion. I share Fay Vincent’s views that merit aid is a bad idea.

Merit aid in the public colleges and universities, however, is where most of the trouble is. States, due to Medicaid and many other federal decisions, are strapped for funds. Higher education is at the end of the food chain. There are not enough dollars and tuitions go up. Public higher ed costs by states have not been going up although tuition has. That’s to deal with funding cuts and higher costs elsewhere — prisons, Medicaid, roads and bridges.

Scarce state dollars to the wealthy as merit aid is something I cannot justify. It works in legislatures because those families receiving merit aid are more likely to vote. Rather than wonder about the distribution of voting by income, states are often rewarding supporters with merit aid. At public colleges and universities, I am in favor of all families submitting financial information. Those who can afford to should pay the full cost. That in most cases would still be a bargain compared to Williams and elites.

What doubles the trouble for state schools is that at flagships and state colleges, the in-state tuition is in most cases an incredible bargain for the middle and upper middle class. On top of the bargain, relative to Williams, pricing, the merit aid is a further discount to those who could afford more.

What’s more troubling is that state often manage aid and budgets entirely by campus and, it seems, per student numbers. The financial aid director at Illinois Champaign-Urbana explained that they didn’t have that much need-based aid because of the admissions requirements. So, he didn’t have students needed to drop out or squeezed. His colleague at Illinois/Carbondale, he said, had lines of students every day, whose car had broken down the week before tution was due.

I can’t explain this to the single mother at Bunker Hill Community College, whose husband died in a robbery, who is trying to get an R.N. on top of a clerical job, who goes to food pantries and can only afford one course at a time. “I’d love to be a nurse,” she told me. At this rate, she’s years from completion. What would it take for her to go full time and be out working as a real nurse in one year instead of five or six? A few thousand dollars. Right now, the Pell Grant she qualifies for, is zero. Nothing. She makes too much money. Until these motivated students are on their way to a solid life, via community college, never mind Williams, I am an opponent of merit aid.

Fortunately for those in favor of merit aid, I am in the unheard — we are far from silent — minority.

#2 Comment By PTC On January 22, 2007 @ 3:17 am

USA today just ran a cover article on wealth and ed. Seems a large % of young men and women who are accepted to their #1 choice are not attending and going elswhere because of the cost. Part of the factor in this is that the #1 choice did not offer them a merit scholarship, while the other institutions did, according to the article. They had some pretty interesting statistics in the article.
If a large % of young men and women are not attending their first choice due to cost, that leaves open a slot for someone on a waiting list that would not have gone, but can afford it? What does that do to the quality of an institution? I wonder what the stats are at Wlliams?

#3 Comment By frank uible On January 22, 2007 @ 3:37 am

Quantity of wealth is not the only factor in these decisions. The absolute value placed on higher education by the decider and the value put on a Williams education by him relative to his perceived value of other colleges are also factors.

#4 Comment By Anonymous On January 22, 2007 @ 4:15 am

Frank- True. But when a large % of students avoid their #1 choice because of the cost… and the fact that this trend greatly has increased (according to yesterdays USA today article)… what does that mean? If larger numbers of students are not going to the best universities of their choice because of the cost… not because of merit… what effect does that have on the institutions, and what if the trend continues?

#5 Comment By frank uible On January 22, 2007 @ 6:08 am

If the effect is negative and if it is foreseeable that the condition will probably persist, what can be done about it?

#6 Comment By PTC On January 22, 2007 @ 9:08 am

Not sure Frank. Nothing should be “free”. Perhaps re looking at scholarships based on need? Diverse work study porgrams? Mentorship programs in the Berkshires based on student interests? Maybe a post acceptance interview with each candidate that asks for financial aid to mold the model to their needs, and the needs of the institution? Summer internships that help pay for school at high powered firms where Williams has connections? Maybe just showing you care enough for such a thing would get more “first choice” applicants and others to re think their choice in schools. Who knows,may even improve their education, and their value to society. Perhaps a partnership with the Armed Forces or OGA that helps the student pay?
One thing for sure, Williams has the horsepower to figure it out. This is the USA,and the sky is the limit.
But again, nothing should be “free”, because nothing ever is. Somehwere,someone, is paying for it.

#7 Comment By frank uible On January 22, 2007 @ 9:13 am

Nor will any of the “fixes” be free although some of them might be inexpensive.