The crisis of access to higher education by students from low- and moderate-income families is likely to be made worse, not better, if other colleges and universities follow the lead of a small number of very wealthy private colleges and universities to eliminate merit aid and provide aid packages for their students that do not include student loans.
These well-publicized moves will not provide full access. Ending merit aid and student loans at a small number of institutions will not change the fact that nationally, high-achieving students from low-income families still have no more chance of graduating from college than do low-achievers from high-income families. That is the real crisis, and it is a national disgrace. As a nation, we are failing to get anywhere near enough of the best students from low-income families motivated and able to afford to attend college.
In recent weeks we have seen a number of commentaries and announcements from colleges and universities meant to show how they are addressing this issue. Some institutions have announced that they will no longer award merit aid to students.  These announcements have been met with almost universal acclaim. Advocates argue that merit aid will no longer be “wasted” on students who do not need it to attend college. They say that money now can somehow be reallocated to needy students, and institutions that continue to provide merit aid are doing so merely and shamefully to increase the number of students with high test scores so that they can achieve a higher U.S. News & World Report ranking. If funds formerly used for merit aid are reallocated to an institution’s existing needy students, that is great for them, but unless such institutions do something to increase the number of able low-income students in their applicant pools, this will not solve our crisis.
Several other private institutions have announced that they will no longer require students who receive financial aid to take out loans  to help finance their education -- their entire financial need will be met with grants. Commentators have again responded with enthusiasm, implying that institutions that do not follow suit are in some sense mistreating their students by requiring them to finance part of their education -- a long-term investment in their own human capital -- with some debt. Student debt loads are too high, but eliminating loans from aid packages is all about admissions competitiveness -- yielding the very best students with financial need -- not enabling more students to afford college, unless by doing so more very needy students apply, are admitted and enroll. Similarly, Princeton University's decision to freeze tuition for the next academic year  will mostly benefit their wealthiest students, who are paying the sticker price, and not needy students.
Let me tell you what is really going on with these moves by wealthy private colleges and universities to drop merit aid and eliminate student loan debt.
The answers may be found most readily in an outstanding recent book: Equity and Excellence in American Higher Education,  by William G. Bowen, Martin A. Kurzweil and Eugene M. Tobin. Here are the key facts. The wealthiest colleges and universities -- those that can best afford the financial aid necessary to enroll large numbers of low-income students -- in fact enroll the smallest percentages of such students. In their attempt to seek or maintain the highest possible competitive position with regard to academic reputation, these institutions seek to maximize the average test scores of their incoming students. Test scores are highly correlated with family income -- the higher the family income, the higher the test scores. Because only students with high test scores apply to these institutions, low-income students are underrepresented in their applicant pools.
After making exceptions for legacies (the children of alumni families), some minority groups and recruited athletes, these institutions then admit students on a need-blind basis. These institutions have the resources to meet the full financial need of admitted students, which means admitted low-income students can afford to enroll, and they will make up roughly the same percentage of enrolled students as they are in the qualified applicant pool. The public and the media applaud these institutions for their commitment to low-income students because they have admitted them on a need-blind basis and met their full need. There is the suggestion that if only institutions like St. Lawrence would follow their lead, all would be well in America on the question of access to college for low-income students -- NOT!
Colleges cannot admit those who do not apply in the first place. Since family income is correlated with academic preparation, I submit that colleges will not improve access in any demonstrable way unless they give low-income students already in their applicant pools an admissions preference and/or they take major steps to increase the percentage of low-income students in their applicant pools. This isn’t just about financial aid, but about which students colleges admit.
A selective undergraduate liberal arts college that is moderately well-off financially, St. Lawrence has an endowment of about $250 million for 2,150 students and raises about $20 million in gifts from private sources annually. We provide merit aid to about a third of our students and graduate students with a relatively high average debt load. Twenty percent of our students are recipients of federal Pell Grants, the grants that go to students from the lowest-quartile of family incomes in America. For the elite, highly endowed institutions that were studied for Equity and Excellence, the average percentage of enrolled students from this quartile was 10.8 percent. Williams, with an endowment of almost $1.5 billion in 2006, had 10.6 percent of its students receiving Pell Grants in 2003-04; Middlebury: $800 million endowment, 9.4 percent Pell recipients; Pomona $1.5 billion endowment, 10.2 percent Pell recipients; Swarthmore: $1.4 billion endowment, 12.3 percent Pell recipients.
Seventy-five percent of St. Lawrence students received institutionally funded scholarships, while 41 percent of Williams’ students do, 36 percent for Middlebury, 57 percent for Pomona, and 53 percent for Swarthmore. St. Lawrence’s institutionally funded student grant aid budget is, on an enrollment-adjusted basis, $7.5 million higher than Williams’, $5.4 million higher than Middlebury’s, $3.9 million higher than Pomona’s, and $4.8 million higher than Swarthmore’s. St. Lawrence students who have received financial aid graduate with more debt than students from these colleges, but they graduate at the same high rate as students who do not receive financial aid. Which institutions are making a larger contribution to the education of low-income students? I guess the answer depends on one’s perspective. The low-income students enrolled at our wealthiest private colleges and universities receive a truly marvelous education and graduate with less debt, but there are far fewer of them at those institutions than at institutions like mine.
Merit aid, which the majority of our wealthy competitors do not provide, is key to our ability to enroll more low-income students. Here’s how it works:
- The merit aid our students with need receive is a partial substitute for need-based aid for which they would otherwise be eligible. We are very clear in our published financial aid information about this.
- Students receiving merit aid have a higher percentage of their need met by grants rather than loans, so they carry a lower debt load at graduation.
- For students qualifying for merit aid who do not have financial need or whose merit aid exceeds need, merit aid lowers the cost of attendance directly.
- In both cases, providing merit aid increases the probability that such students will enroll at St. Lawrence.
- Without providing merit aid to some students who have no financial need, fewer of them would enroll.
- There is indeed a positive impact on our student profile from their enrollment, but the average merit-aided no-need student pays St. Lawrence more in net tuition than the average St. Lawrence student pays. This is how we are able to afford to enroll so many more low-income students.
We believe that one of our responsibilities as a leading liberal arts college is to do our share of the educating of low-income students. This is a noble motive, not a base motive, and even though we do provide merit aid, the resulting distribution of student and family cost of attendance by family income is highly progressive, as the figure below shows.
Average Net Tuition at St. Lawrence, by Family Income, 2006-7
|I ncome Level||Net Tuition|
|Less than $20,000||$574|
|$100,000 or more||$18,130|
|Unknown income or no need||$30,585|
Students from families with income less than $40,000 pay only a minimal amount of tuition. These students do have to pay for room and board ($9,060 for 2007-08) and typically make up much of the difference by summer work, on-campus jobs, and student loans. There is rarely any real parental contribution for students in these family income categories. Even though St. Lawrence gives some students merit scholarships beyond need, average net student payments rise greatly with family income -- a highly progressive financial aid program.
I have pressed this logic on presidential colleagues from wealthier institutions without much success. They continue to believe that the only approach to student aid that captures the moral high ground is the approach their institutions use, which does not alter the reality that they enroll very few low-income students, as Bowen et al. have shown. Until this writing I have avoided talking in public about these matters in this way, outside of my own institution, so as not to appear merely defensive. However, the unwillingness of presidents like me to speak out is resulting in a serious misunderstanding by the public and by federal and state legislators of the national student aid and family cost of education picture. This then leads to an inability to define and fund appropriate public policies.
My presidential colleagues from wealthier institutions do not have to provide merit aid because their academic reputations and wealth allows them to attract high ability students from high-income families without it. That means, actually, that they have even more flexibility to enroll low-income students than we do at St. Lawrence. Why don’t they use their financial flexibility for this noble purpose? I hope the recent decisions of some institutions on merit aid and student loans do result in their enrolling more low-income students.
Equity and Excellence explains that at the wealthy private colleges and universities in their database, controlling for academic ability and high school academic performance, recruited athletes have a 35 percent advantage in gaining admission, and then under-perform academically relative to what one would predict from their ability and high school performance. At St. Lawrence, recruited athletes are representative of the student body as a whole upon admission and then out-perform the expected value academically. Legacies have a 20 percent advantage in gaining admission, while American students of color have a 25 percent advantage in gaining admission to the Bowen et al. set of institutions. One would think that this advantage for students of color would increase the percentage of low-income students, and it does. The students who are missing from this picture are low-income white students.
In reality of course, these institutions are not actually need-blind in admissions because recruited athletes, who receive a 35 percent admissions advantage, also come from families with above-average incomes, the children of alumni have higher-than-average family incomes, and many of these institutions will in addition dip down below their academic profile to admit students from high-income/high asset families that may be prospects for major gifts. They are need-blind only for applicants who are not legacies, not recruited athletes, or not from very wealthy families. In fact, what they really are is quite “resource-aware.”
Some have suggested that, even if elite institutions were to seek to enroll more low-income students, not enough of them are out there who have the ability and preparation to benefit. But a study by Catherine B. Hill and Gordon C. Winston  shows clearly that there are indeed more than enough low-income, high-ability students who could thrive in the academic environments of the most selective colleges to allow them to have student bodies that would mirror the overall distribution of American families socio-economically. This would mean, however, that these institutions would have to increase their financial aid budgets (they can afford it) and decrease their commitment to maximizing the average SAT scores of their incoming class, and for many of these institutions that is unthinkable. While some of these elite colleges say that they do this now, the incredibly small numbers of low-income students most enroll suggests that they don’t do so nearly enough.
Colleagues from such institutions respond to the that they should “put a thumb on the scale” for low-income students in admission that all it would do is move low-income students from institutions like St. Lawrence to their wealthier competitors, with no net increase in the number of low-income students attending college. I believe they are wrong. In the 1980s, college enrollments grew steadily, despite a 35 percent decline in the number of high school graduates. That was made possible because colleges and universities, scrambling to maintain enrollment, re-tooled themselves to help able students with less adequate high school preparations succeed, and many institutions also broadened their markets by enrolling older and international students. With institutional commitment and appropriate public policy, I firmly believe we could again expand the pool of able low-income students enrolled in our colleges.
There are two other public goods that would result from changed behavior among the elite and wealthy private colleges and universities. More low-income students would benefit from the wonderful richness and quality these highly selective institutions provide if more were enrolled. And very importantly, these institutions -- very influential opinion leaders in American higher education -- could do the same for socio-economic diversity as they did for racial diversity several decades ago. By committing to be racially and ethnically diverse, for reasons of social justice and because of the educational value of such diversity, after a history of exclusion, these institutions helped set the bar for the rest of us. They are now very diverse ethnically and racially, and they set the standard that I aspire to at St. Lawrence. I believe they should do the same with regard to socio-economic diversity. If they do, we will make more progress faster in the nation as a whole.
Instead, we are hearing arguments for the elimination of merit aid at institutions like St. Lawrence, and that students and their families should not have to treat a college education like a long-term investment financed, like a house, by some debt. This reasoning deflects attention away from the poor job I believe our most wealthy private institutions are doing with regard to socio-economic diversity. If recruited athletes can have a 35 percent admissions advantage and legacies a 20 percent admissions advantage, surely students from low-income families can also have an admissions advantage. Providing merit aid and expecting needy students to finance part of their education with debt helps St. Lawrence afford to have the high level of socio-economic diversity that we do. Our path to achieving that diversity, a product of our particular history and circumstances, may be different from the path a wealthier institution might take, but it is still a noble path, given the ends and the outcomes.
Some of the recent institutional choices regarding merit aid and student loan debt may be reasonable and appropriate in a particular institutional context. But media commentators and others are making it harder rather than easier for the public and our elected officials to understand the underlying structure of subsidies that exist in American higher education. Blame is being put on colleges and universities, as in the recent Spellings Commission report, for what are really deep and profound failures of public policy in America that are keeping us -- the wealthiest nation in the world -- from enabling millions of able but low-income students to attend and complete college. This has to change.
Daniel F. Sullivan is president of St. Lawrence University, in Canton, N.Y.