Public Colleges Pull Need-Based Funding for Poor Students

By Chris Hoenig

Photo by Shutterstock

Public colleges and universities were established largely as a way to provide an affordable education. But analysis of new data shows that many public schools are pricing themselves out of the picture for students who need it the most: those coming from low-income families.

State subsidies and public funding originally meant that students from low-income families could find a way to afford state and public schools, with many becoming the first in their family to earn a college degree. Lower in-state tuition rates and the availability of need-based grants provided these students with the means to attend and continue their education.

A ProPublica analysis of a U.S. Department of Education study, however, found that the portion of institutional grants going to the lowest-income studentsgrants funded directly by the college or universitydropped by roughly one-third over the last decade and a half. In 1996, the study found, 34 percent of institutional grants were given to students in the bottom quartile of income. By 2012, that number had shrunk to 23 percent, with the trend continuing downward.

But perhaps even more alarming is where the funding that’s being taken away from lower-income students is now going. During that same 17-year span, the portion of institutional grants given to students in the top 25 percent of income grew by more than 40 percent. Last year, the percentage of these grants given to the poorest students (25 percent) was nearly equal to the percentage given to the most well off (23 percent).

It’s a problem that’s been written and talked about regarding private colleges for years. Yes, private institutions provide a top-notch education. Yes, many of these schools are considered top-tier, elite schools. But they also come with a top-dollar price tag and are usually bottom-rung when it comes to need-based aid.

For public schools, the reasons for the change in philosophy are the same as the driving forces for private schools: profit and prestige. “For some schools, they’re trying to climb to the top of the rankings. For other schools, it’s more about revenue generation,” said Don Hossler, a Professor of Educational Leadership & Policy Studies at Indiana University.

That means grant money is used to persuade out-of-state studentsand their double-priced tuitionto come to the school, or to convince applicants with strong test scores that this is the school for them. “The most-needy students are getting squeezed out,” said Charles Reed, a former Chancellor of the California State University system and of the State University System of Florida. “Need-based aid is extremely important to these students and their parents.”

Follow the Money

Hossler, who has also served as Vice Chancellor for Enrollment Services at Indiana University, knows that schools play clever games to maximize the money coming in compared to the grant money going out. “One of my charges was to go after what I would call pretty good out-of-state students,” he said. “Not valedictorians, not the top of the classstudents who you didn’t have to give thousands and thousands of dollars to in order to get them to enroll.”

For example, if a school had $12,000 of “merit aid” available, it can offer the entire sum to one need-based student, or offer $3,000 to four separate applicants who scored higher on the SAT but don’t have as much need for the financial aid. The four students bring in more tuition money than the lone need-based applicant and provide four times as much SAT data to raise the school’s rankings.

It’s not difficult to guess which way administrators are going. “Merit aid isn’t always going to the very best students,” Hossler said. “It’s an intentional strategy to help offset the loss of state support.”

What’s in a Name

For some public schools, rankings and prestige are more important. Shauniqua Epps had the kind of rsum many public schools used to look for. She graduated from a South Philadelphia high school with a 3.8 GPA, was a two-sport varsity athlete and served as president of her school’s student government.

She was admitted to her top-choice school: Lincoln University, one of the first Historically Black Colleges or Universities (HBCUs) in the country. Lincoln was founded as a private institution in 1854 to serve the Black community, eventually becoming a public school in 1972. Epps’ combined 820 on the math and critical-reading portions of the SAT put her squarely in the middle among the test scores of other new students over the past several years.

But there was one hitch: In 2009, Lincoln adopted a strategic plan to “continuously improve its SAT and GPA averages for incoming cohorts.” That basically means offering whatever it takes to get high-performing students to choose Lincoln. “To attract top students to your institution, you have to be able to offer them a competitive scholarship package,” said Lincoln University President Robert Jennings. “That’s usually a full-tuition scholarship, that’s a private room sometimes or laptop computer, or a whole bunch of other perks. That’s what schools do. All schools do it.”

It means doing the opposite of what Indiana does and giving larger pieces of the financial pie to fewer students, except the students are determined based on academic achievement rather than need. Lincoln’s admissions flyer spells it out: Epps’ 820 SAT score was not good enough to receive an alumni-endowed, $4,000, one-year scholarship, much less the renewable top-tier offers. When the school sent her an email laying out her financial-aid package, it contained federal and state aid but no grant or scholarship money from the school.

The story is the same at the two other state schools, Millersville University and East Stroudsburg University, Epps considered attending. Because her mother lives on Social Security disability and her father died when she was in third grade, the $4,000 per year it would have cost Epps to attend Lincoln (after maxing out federal student loans) would equal roughly half of her family’s total income. The amount was too much, even though Epps was a natural fit for the school.

Steering Students Away

Lincoln has been “trying to steer that lower tier of studentstudents who need much more helpinto community colleges,” Jennings said. “That’s why you have community colleges. They, too, are public institutions, and we have built collaborative relationships with them.”

Some experts say public schools these days are just shirking responsibility. “In a way, four-year colleges are asking two-year colleges to do the dirty work of selecting who’s worthy of a four-year college,” said Tom Mortensen, a Senior Scholar at the Pell Institute for the Study of Opportunity in Higher Education.

It’s where Epps has ended up, attending the Community College of Philadelphia.

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