'Aiding Students, Buying Students'

In 1643, Harvard University received a gift of 100 pounds to support the education of a student who was "pious" but poor. And so American student aid was born well before the United States.

October 14, 2005

In 1643, Harvard University received a gift of 100 pounds to support the education of a student who was "pious" but poor. And so American student aid was born well before the United States.

That gift kicks off Rupert Wilkinson's new book, Aiding Students, Buying Students: Financial Aid in America (Vanderbilt University Press). The book is more of a history than a policy guide -- taking readers through the development of student aid at public and private colleges, and from private and government sources. But there are many references to current policy issues, including many before Congress as it reauthorizes the Higher Education Act.

Wilkinson, a former professor of American studies and history at the University of Sussex, in England, has written numerous books and articles on elite groups and education in the United States and in Britain. He answered questions about his book and the current debates over student aid.

Q: How did you come to write this book? How did your scholarly interests lead you to this issue?

A: I attended American universities in the late 1950s and  1960s, a period when the Phillips Academies, followed by Ivy League universities, were establishing "need-blind" admissions, combined with meet-all-need financial aid. This contrasted with the British elite boarding schools about which I wrote my first book ( Gentlemanly Power, 1964); they gave very little need-based aid, and had even sometimes turned their original free places for "poor scholars" into merit scholarships requiring expensive pre-prep-school training.

Thinking about this much later as an American studies scholar, I realized that financial aid was a fitting topic for the history of ideas -- practical, applied ideas -- as well as political and economic analysis. There have been many motives for aiding students in America, depending on time and place. But nowhere has student aid been more important than in this country. where high charges must be offset by aid to square with democracy.

Q: Most of the oldest and many of the most prestigious institutions in the United States are private. How did that fact shape the development of student aid in the U.S.?

A: Many of America’s  older private institutions started life as  church colleges, founded by ambitious clergy and their allies to civilize the frontier. Like the railroads, they were built in sparsely populated areas ahead of demand. With little, if any, subsidies from state governments, they could only stay in business by offsetting their tuition fees with discounts and grants, informal loans (deferred tuition), and opportunities for student jobs, as well as energetic fund-raising. This set the pattern for today’s kaleidoscope of tuition levels and aid packages.

Q: In the title of your book, what is the difference between “aiding” and “buying” students?

A: I’ll answer this mainly by looking at aid provided by colleges themselves. Aiding students is what most people think of as the proper use of aid: extending opportunity and easing family burdens by helping students get through college. It is student-centered. Buying students is college-centered. It focuses on how a college uses aid to buy the student quantities and abilities it wants,  whether  through tuition discounts to keep up enrollments, or scholarships to recruit talented mathematicians, brilliant bassoonists, or strong athletes.

Aiding and buying can overlap: for example, extra grants to minorities and low-income students extend opportunity while buying diversity for the college. But they can also conflict, as when a college uses scholarships to buy “student quality” (which often means well-prepared, well-to-do students) rather than aiding more disadvantaged students.

The two terms also apply to state and federal aid. Governments use aid both to extend educational opportunity and buy the development of “human capital.”

Q: Americans have historically loved stories of people who are "self-made," which accounts for many reports about people who worked their way through college. How accurate are these stories and how do they shape the way Americans look at student aid?

A: Accurate, yes, but the influence changed. In the 1890s, Harvard’s President Charles William Eliot said he knew “scores” of students who relied entirely on work to get through college. And as late as the 1930s, college and government reports commonly referred to needy students as “self-supporting” students, though the students themselves did not always enjoy the experience.

Until the mid-20th century, though, many college and public leaders used the idea of “working through college” to oppose big extensions of grant aid on the grounds that it would foster dependency. The 1940s GI Bill weakened this resistance by giving full tuition plus maintenance to veterans who in turn earned a reputation for hard work and subsequent success. Rising tuition fees, anyway, have made it impossible to get through an expensive college on work alone. Student employment remains an important part of financial aid packages, and the old idea of working through college helps justify it within limits, but pulling a big grant on the basis of financial need is now entirely respectable.

Q: From a historical perspective, how significant is the rise in student debt levels and the rise in tuition levels in recent years?

A: Until the 1930s at least, rising tuition fees, relative to other prices, were largely offset by falling room and board charges. At private colleges, total charges, relative to median incomes, surged in the 1950s-60s, and the same happened for most colleges from the 1980s on. This landed more and more students with financial need and big loan burdens, as grants did not keep up with need. The investment boom of the 1990s did enable the richest, most selective private institutions to reduce low-income student burdens by big expansions in grant aid, but across the board student debt escalated. A special worry here is that Hispanic Americans are an increasing proportion of the traditional college-age population, and several studies have shown that Hispanic Americans are particularly averse to student debt and thus may be deterred from going to college.

Q: If Congress asked you for advice on the reauthorization of the Higher Education Act, what are the most important things lawmakers should do?

A: (1) Consider a range of ways to reduce loan burdens,  including interest reduction on subsidized loans and repayment of direct federal loans through a graduate tax not levied on low incomes.

(2) Replace current "campus-based" federal grants for needy students, which are allocated to colleges on archaic and unfair formulas, by “student/program” grants, combining financial aid with academic support for disadvantaged students, and allocated to colleges more simply according to their proportions of very needy students.

(3) Require the Department of Education to publish ratings of the richest institutions showing the proportions of their students  with family incomes under the national median.

(4) Revise current antitrust laws to make it easier for more colleges to cooperate in limiting aid not based on financial need.



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