Aiding Students, Buying Students: Financial Aid in America

Part III. Reforming the System

  175 Part III Reforming the System In looking at the history of student aid, what lessons can we learn for the future? Let’s start with the three main strands in the history : diversity of motives, the conflict between aiding needy students and other educational spending, and the interplay between mission and market . Mixed Motives Even within need-related aid, economic class justice—giving more opportunity to poor students per se—has not been the only motive. For those who value this kind of justice, there is good news and bad news. The good news is that other motives and allies—fellow travelers, as it were—can be enlisted to support aid for the needy. The bad news is that the fellow travelers may fall away or divert aid from the neediest. Through much of financial aid history, the image of the poor and pious student, often bound for the ministry, was a potent force for “beneficiary ” aid. This force obviously lost power in the more secular twentieth century, and long before that, it could have lopsided effects on educational opportunity. The Princeton report of 1896 (mentioned in Chapter 4), which stressed beneficiary aid in recruiting churchly adherents to the main college’s Presbyterian culture, said only in passing that the science school had just one scholarship, whereas a third of the main arts college (the “Academic Department”) received grant aid. Again, in today’s very different world of selective private-college ad- 176   Aiding Students, Buying Students missions, the educational value attached to racial and ethnic diversity helps to promote need-related aid but tends to favor middle-class minorities , through admissions targeting and “preferential packaging” of aid, over low-income white students.1 Message for future policies: if you want to extend the social reach of student aid, by all means use other agendas but don’t count on them too much or let them eclipse basic appeals to social fairness. Aid for Needy Students versus Other Spending College budgets have had two kinds of “other spending”: merit aid not requiring financial need, and general college spending on programs (including faculty) and facilities. At elite private colleges, general spending has been the greater threat to increased access for needy students, especially very needy students. Although merit aid has increasingly gone to richer students, it has always benefited some needy ones. How much it has depleted need-related aid rather than just adding to it is debatable. And the most prestigious colleges have resisted merit aid the most. Programs and facilities, on the other hand, have competed with student aid for dollars since the seventeenth century. To push this point too far as a complaint would be absurd: funding access to good education would be meaningless and impossible if most of a college’s budget was spent on student aid and little on the education itself. Nevertheless, student aid at leading colleges has often had to struggle against growing claims on the college budget from other quarters. The struggle has often been indirect, through rising student charges. As colleges upgrade their facilities and improve their programs with more and better-paid faculty, they have tried to recoup the added costs not just by fund-raising but by hiking tuition and other charges. Student aid has often done no more than keep up, if that. At the same time, escalating prices can give a false impression of aid effort for needy students. When charges went up faster than most incomes —as they did at private colleges in the 1950s to 1960s and 1980s to 1990s—more students and richer students qualified for grant aid on the basis of need. At expensive colleges, by the early years of the twenty-first century, students with family incomes over $160,000 were qualifying for part III Reforming the System  177 need-related grants, especially if they had brothers and sisters in college too. Colleges in this situation often lamented virtuously that they were spending more and more on financial aid, when in fact they were just compensating for becoming more expensive and were not necessarily doing more for low- and middle-income students. Message: spending on wonderful programs and facilities and spending on wide access are not totally compatible. “Excellence” should concede something to access and not just vice versa. Mission and Market The third theme in college financial aid history, the interplay between social /educational and financial/market purposes, is...