Rate colleges on access
By
Robert B. Archibald and David H. Feldman
May 13, 2005
AS SURE A SIGN of spring as blossoms, the season of college
tuition increases is upon us. The
Despite highly publicized actions by elite universities
such as Harvard to eliminate tuition for students whose families earn less than
$40,000 per year, access to higher education for children of less-affluent
families is eroding. The maximum federal Pell Grant today has a lower
purchasing power than it did 25 years ago.
Moreover, an increasing amount of grant money is being
redirected by both states and schools toward "merit scholarships" and
away from students with financial need. Over the past 10 years, the share of
state grant aid that is not based on need has risen from just under 10 percent
to over 23 percent.
These trends have real consequences. In June 2002, the
Advisory Committee on Student Financial Assistance reported to Congress that
over the next decade, financial barriers will shut off access to college for
more than 2 million high school graduates from low- and moderate-income
families.
The shift toward merit aid is troubling because it doesn't
increase the number of qualified students who receive a higher education.
Students already have ample incentive to do well in high school in order to get
the prized acceptance letter. Merit aid's primary effect is to concentrate
talent at schools with deeper pockets.
To hang onto some of their best students, schools with
fewer resources must nevertheless try to compete. The result is a competitive
arms race that siphons away resources that could have been used for need-based
grants. As a result, merit aid actually reduces access to higher education.
Although all parties share the blame, colleges and
universities play an increasingly important role in providing grant aid for
their students. In 1980, schools provided only 18 percent of the grant aid
given to students. Federal and state sources provided the remaining 82 percent.
The split is now 50-50.
While institutions are unlikely to admit to this, improving
their standing in the annual U.S. News & World Report ranking of colleges and
universities is a powerful incentive to shift their own internal grants toward
merit aid. The higher the entering students' test scores or the greater the
percentage of entering students in the top 10 percent of their high school
classes, the higher the ranking in U.S. News.
The U.S. News rating game is not going to disappear; it
sells too many magazines. Also, U.S. News periodically tweaks its formula for
determining the rankings. The editors recognize that the rating system is an
imperfect art, and they strive to improve it. They also know that some movement
in the rankings keeps public interest high. This suggests a win-win strategy
for U.S. News and for students with financial need if the magazine were to add
financial aid performance to the data used to determine the rankings.
We propose including for each institution a measure of the
cost of attendance that remains after a student with demonstrated financial
need deducts all grant aid he or she receives. These data are easy to collect
and to interpret. Each school would be asked to provide four numbers: the
highest dollar amount of need not met by grants for any student in the first-,
second-, third- and fourth-year classes. Averaging the four years would punish
any school that reduces its grant aid after the first year.
Our focus on the low- or middle-income student worst served
by the institution's financial aid system is purposeful. We want to create
incentives for institutions to bring up the bottom.
We do not know how much weight U.S. News could be persuaded
to give this measure, but it should be substantial. Every school must believe
that there is a change in the incentives. To be one of the nation's best
colleges, an institution should serve all segments of the population. As it is
now, many low- and moderate-income students do not think they can afford the
burden of the loans they would have to take out if they attended an excellent
but expensive college or university.
Our colleges and universities are deeply concerned about
the underlying issue. They understand the social importance of open access to
higher education. But colleges are governed by people who were successful
students who learned that what was on the report card is important. U.S. News
controls the report card. It could help contain the merit aid arms race by
adding financial aid performance to its rankings.
Robert Archibald and David Feldman teach in the economics
department at the
Copyright © 2005, The Baltimore Sun