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.
Many 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.
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.
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.
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.
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"!
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.
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Equity indices were pressured from the start following some overnight developments that weighed on sentiment. The market tried to overcome the early weakness, but could not stage a sustained rebound, ... More
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Bill Stiritz owns more than 5% of the company, and has experienced an estimated $145 million in paper losses on his investment.
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