More college aid going to wealthier students

Scholarships are becoming a tool to lure top talent, who often come from privileged homes, while the poorest are left to take on debt.

By Aimee Picchi May 8, 2013 1:25PM

College fund stored in glass jar in kitchen © Vstock LLC, Tetra images, Getty ImagesMany colleges tout their financial aid practices as providing an affordable education to the less affluent, but a new study says those claims are more wishful thinking than reality. 

Instead, more private colleges are awarding "merit aid" to top students -- who usually come from privileged backgrounds -- while working-class and poor families are charged unaffordable rates, according to a report from the nonprofit, nonpartisan New American Foundation. The group's chairman is Eric Schmidt, the executive chairman of Google (GOOG). 

Almost two-thirds of private colleges charged families earning less than $30,000 a whopping one-half of their annual income, or a net price of more than $15,000. The net price is the cost after scholarships.

"Financial aid has increasingly become a weapon that four-year colleges wield as they fiercely compete for the students they most desire," the study says.

There's been a striking shift in how merit aid is doled out today versus financial aid, which helps middle- and low-income families afford college. 

During 2007-08, private colleges distributed merit aid to 44% of students, almost double the percentage of students receiving it in 1995-96. Meanwhile, financial aid helped 42% of students, down from 43% a decade earlier, the study says. 

The result? Needy students are left "with mountains of debt after they graduate," according to the report. 

Several colleges were singled out, including Boston University, which the report says undermines its need-blind admissions by using financial aid to reward talent. The net price was almost $24,000, which may explain why loan borrowers graduate from BU with average debt of $37,000. 

The study dashes cold water on new data released by the National Association of College and University Business Officers, as reported Tuesday. That study found the so-called tuition rate for private universities hit an all-time high of 45% for incoming freshmen last fall. 

It's unclear which types of students are receiving the aid, however. 

"Colleges are always saying how committed they are to admitting low-income students -- that they are all about equality," Stephen Burd, the author of the New America Foundation report, told Bloomberg. "This data shows there's been a dramatic shift. The pursuit of prestige and revenue has led them to focus more on high-income students."

Follow Aimee Picchi on Twitter at @aimeepicchi.

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May 8, 2013 2:04PM
oh no!  someone whose parent work for a living are getting help!  sound the alarms!

What I find disconcerting is that high achievers are associated with high income. Aren't some of those high achievers receiving scholarships from low income families? I was. I got both merit-based scholarships and financial aid when I attend an expensive private college. However, I do agree that more income-based financial aid is needed.

May 8, 2013 3:29PM
Terms like "rich students" and " affordable housing" are meaningless without a proper definition of the adjectives. Activists love to throw undefined terms around. It helps them to paint a negative picture without having to prove anything.
May 8, 2013 2:25PM
What a novel idea.  The money for scholarships goes to students who have worked for it and have higher grades.  I don't care what your background, income, or skin color is, but I don't want the tax dollars I pay to the federal government creating scholarships for sub-par academics.  I worked from the time I was 15 to pay for school.  It can be done without scholarships or loans.
May 8, 2013 2:53PM
Interesting how the article manages to re-characterize merit based aid into something bad.  I guess the author believes that money should be going to the less bright bulbs.
May 8, 2013 2:23PM
Top talent gets scholarships. If your a stud football player a school could care less your financial situation. Why should it care when attempting to attract top scholastic talent. The MSM never tires of class warfare. It is OLD and STALE.
May 8, 2013 4:20PM
This article is so bogus!  I work in a college financial aid office.  I see all kinds of financial assistance going to students who have financial need, but very little funds going to students who are middle class and up.  We have a system that rewards those who do nothing, and penalizes those who try to achieve.  The students who do receive a several scholarships are very few in number, and only receive these funds at graduation.  This article is proof of the determination of the media to demonize people who have incomes.   Yes, MSN is always provocative in their articles.  They certainly aren't about to let truth get in the way of any article that they wish to print! 
May 8, 2013 3:28PM
Who needs debt?  Work for a few years and save your money while living with your parents, so when you graduate you will have a start to a college fund, then work your way through college.  Or, go to work for a company that pays for, or partially pays for college and go to school nights.  Or go to a much less expensive two year vocational school.  Or go to work as a laborer, pipefitter, electrician, mechanic, iron worker, operator, etc., which doesn't cost anything out-of pocket, and has good benefits through the union.  There are lots of alternatives to an expensive college, and going into debt. Besides, not everyone is cut out for college for a number of reasons.
May 8, 2013 7:19PM
The bulk of scholarships SHOULD go to the best students from highest ranking high schools. The ones that work hard academically, get the best grades and have the best potential for graduation regardless of the working status and income of the parents.
May 8, 2013 2:45PM

I work for a company that helps families navigate the financial aid system and this is nothing new.   Colleges have been using the type of financial aid (scholarships and grants vs. loans) to entice the students they want at their school for years.  If the school is ambivalent about having your child attend  the financial aid offer might be primarily loans, but if your child has something the school desires they will offer all scholarships and grants so that your child will pick them.

May 8, 2013 3:18PM

Well now that we have arrived directly into Socialism, we can see out far enough that we will be smack dab in the middle of communism shortly.


You will know that is coming when you see the elite try to take away your rights to defend yourself because they are taking your rights away faster than you can comprehend or agree with.


I don't carry a gun or have a need for one but I am firmly behind others rights to legally bear arms.


I don't care how much money your parents make, if you deserve it, you deserve it.  Not everyone has to be economically equal at the snap of a finger, perhaps, just perhaps, someone on their family tree buster their nut to move up in class and we should respect that sacrifice.  Otherwise, let the state adopt every child and take over parenting so that every kid starts equal.


May 8, 2013 1:42PM

You know how it works don't you?  Water seeks it's own level-so do the elites and "illuminati".  Money flows up not down, and if it does, it's just a "trickle"!

May 9, 2013 12:27AM

I'm getting really sick of those such as this Garand character implying low income means people who do not work and I assure you I'm not the only blue collar who feels this way. It may behoove you all to recognize that we toil, sweat, and yes even bleed under conditions truly spoiled individuals such as yourself could not or would not tolerate for what is increasingly felt is our due (and this is saying a lot). Meanwhile we must put up with with self-seeking self-supposed lofty @$#%&!s like you thumbing your nose at our increasingly put upon ranks. We are tougher, stronger, angrier, and more fed up daily. So sound the alarms indeed. It will avail you nothing if you keep it up douche.

May 9, 2013 1:41AM
Another fallacy I'm tired of hearing. No legals want to work. I do, for a decent wage, that's the problem. Ask many  employers what a fair wage is. Their idea would be whatever is most "fair" for them. Minimum wage for what is clearly not a minimum wage job or less if they can get away with it. What the myopic can't or choose not to see is the way illegals live when they work here at least not in an income relevant way. A dozen or more to residence, sharing cars, and many more things that are supposed to be beneath the American standard of living. Then sending the lions share of their earnings back home where it's worth a lot more and they can live well off of it when they go back even being deported repeatedly works out pretty well for them. So they are willing to work cheaper beneath the typical cost of living, beneath fed min. wage. It's hard to compete with that. Most conservatives will keep sucking up and regurgitating the "no legals want to work" talking points as they do most of their thoughtless tripe. Because it's good for them, good for business(like shipping jobs overseas), and as far as they are concerned(insulated as they are) good for America.
May 8, 2013 3:03PM
We have too many illegal immigrants already pushing mowers, painting, and roofing.  If the derelicts that want to go to college on somebody else's dime would pick up a hammer or shovel, we could send the illegal's packing.  But as long as they want to hang out at the library studying philosiphy with the college girls, I guess we need them because no legals want to work, other than push a pencil.
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