Merit aid’s bait and switch

Penn State University is asking its honors college students to return, I mean “donate,” their $3,500 merit-based grants back to the university. The university is only asking those students who have no unmet financial need to donate and so far the appeal has brought more than a quarter of a million dollars back to the university.

Evidently, the university failed to provide enough need-based aid to its low-income students and is now trying to backtrack. According to the Associated Press strory, last year students attending Penn State had more than one million dollars in “unmet” financial need so it’s hard to think that the university never saw this coming! Sure, this happened at Penn State, but the story could easily happen at any one of the 650 public four-year college in the U.S. because they all operate in similar environments and follow similar administrative styles.

This over-spending on merit aid doesn’t surprise me one bit because the higher education marketplace has become a “positional arms race” (pdf) where colleges are aggressively competing for the best and brightest, often at the expense of providing adequate aid to lower-income students. This is all happening during a time that the federal Pell Grant is losing its purchasing power and states are having a tough time to fund students as they once did. So, colleges have become the last place poor kids look for aid…only to find it’s not available.

This is a perfect example of how colleges are playing the student aid game, and it is perfectly in line with my dissertation research concerning the way public colleges offer need-based and non-need-based subsidies.

Higher ed and President Obama

I caught this NPR clip (here) earlier this week discussing how President Obama might address some higher education issues. A couple of news articles covering the same topic can be found here and here and the best one is here.

Knocking the rust off

It’s been a while since I’ve posted anything on this blog. I suppose after my qualifying exams, I pretty much lost all motivation to do anything related to school or dissertation work! But, school began a couple of weeks ago and I’m finally awakening out of hibernation. Or so I’m trying to tell myself.

In my attempt to get back into the right mindset of “dissertating,” I wanted to share a quick post about an idea that I would love to see pick up some political momentum. Long story short…

College endowments

Some folks are familiar with college endowments and some folks aren’t, so here’s a quick post to fill you in on what you need to know. My dissertation has to do with college finance, and you can’t talk about college finance these days without talking about endowments.