I have a friend who is so wealthy that she and her husband don’t qualify for financial aid even though they have three kids attending college right now.
She’s a financial planner and her husband is an attorney and they can easily write checks to all three schools including Georgetown University which costs around $50,000 a year.
Last spring I told my friend, lets call her Julie, that she wouldn’t have to pay full price if her daughter, a high school senior, found schools that handed out merit aid. This is the money that schools shower on affluent families who don’t qualify for need-based financial aid.
Julie’s daughter ended up applying to a liberal arts college in Iowa last spring that dispensed merit awards. Her daughter received a tuition discount, but what was amazing was what happened after Julie told the school that it wasn’t enough of a price break. Julie explained that her daughter could attend a California state school for less money and that she’d stay in the state unless the college could grant a higher merit award.
If I had been in her circumstances, I don’t think I would have been gutsy enough to try this, but it worked.
I’m sharing this story because it illustrates a trend in the higher ed world that continues to grow. Colleges and universities are spending more of their cash on merit awards aimed at attracting affluent kids at the expense of poorer ones.
Back in 1994, 66% of institutional aid was reserved for needier students, but today that percentage has shrunk to 49%. Schools are now devoting 43% of their aid money to people like my friend.
That is one of the conclusions of a new report commissioned by the National Association for College Admission Counseling. You need to be a NACAC member to read the full report, which was written by Donald E. Heller, director of the Center for the Study of Higher Education at Penn State University. You can, however, read a news account here about the merit aid phenomenon along with the study’s other key findings.
Lynn O’Shaughnessy is the author of The College Solution.