Education Conservancy: Colleges Should Collude to Cut Merit Aid

<p>I don't know much about an organization called the Education Conservancy, but there was an article in Inside Higher Ed that included a very disturbing paragraph:</p>

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Thacker noted that the Education Conservancy is also working on other efforts. He met recently with a major philanthropic leader about a project in which the conservancy would explore ways that colleges might collaborate without fear of violating antitrust laws. Many private college leaders have said that they believe they might be able to reduce the "merit" aid they award (frequently to students who aren't needy) if they could do so in conjunction with other colleges -- through agreements that many fear could attract antitrust scrutiny.* [Emphasis added.]*

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<p>From News:</a> Shift for Education Conservancy - Inside Higher Ed</p>

<p>That an organization would want to assist colleges in price fixing seems downright strange to me.</p>

<p>Roger:</p>

<p>You should read cc more! We've had plenty of discussions of Thacker and the EC.....</p>

<p>thats exactly what the Ivy group (ivy league + MIT) did for years. To avoid bidding wars for desirable students. It doesn't seem strange to me at all. (I am not clear on the current legal status of such efforts)</p>

<p>It will of course be much harder to implement beyond the Ivy group, as there are so many more colleges involved. </p>

<p>This won't impact currently admitted students, AFAICT.</p>

<p>Ivies don't give merit awards. However there is a group of colleges that have signed agreements to use the same financial aid methodology, exchange ED acceptance lists, and have standardized their procedures. Many selective schools in that group and they are the ones that tend to meet need or come close to it. I think that would be the first place that would get hit since there is already a pipeline established there.</p>

<p>I have had a chance to meet Lloyd Thacker at a conference last year. We had a spirited discussion. He has never been shy about bashing on merit aid. He seemed much more concerned about the needy students. The middle class students are often the ones struggling to figure out how to pay for college. Merit scholarships seem to close the gap for many of these kids. </p>

<p>I don't understand the price-fixing monopoly, either. It's interesting how he has also bashed on College Board, but now seems to be in a partnership with them. I don't know enough about this new partnership to know whether Thacker has compromised, or the College Board, truth be told.</p>

<p>I will say that prior to meeting him I read the Ed Conservancy book and embraced many of the lessons. After this meeting, I wasn't so much of a fan of him, personally.</p>

<p>"That an organization would want to assist colleges in price fixing seems downright strange to me."</p>

<p>It might seem less strange if it's thought of as an attempt to reduce bribery. Perhaps the schools don't like the system they feel trapped in, where they must bribe well-to-do students to matriculate.</p>

<p>^But if those colleges DON'T use merit aid to attract top students, then how are they going to pull them away from highly ranked colleges?</p>

<p>For example, if student X gets into an Ivy and into a far less renowned school, and the price tags are the same, almost every student will choose the Ivy. But merit aid can put a different spin on things, especially if the student doesn't qualify for merit aid, but is reluctant to go into/put their family in debt.</p>

<p>Maybe they are trapped in the system, but I don't see any other way for these colleges to attract desirable students (though I haven't spent much thought on it).</p>

<p>How convenient that a group wants to destroy merit aid, as if a person with sheer intellectual ability is not someone who would add to the life of the campus, the prestige of the school, and the achievement of other students. </p>

<p>Will the group also tackle athletic scholarships? I kinda doubt it. Inter-collegiate athletics is a much larger drain on school resources and ends up costing everyone much more than a few merit scholarships handed out to smart kids.</p>

<p>misssilverwing is correct, this will encounter resistance esp at the near ivies and new ivies that are using merit aid to pick off otherwise ivy bound students and lift their stats.</p>

<p>parents - if the model is the Ivy group, than it would mean no athletic scholarships either.</p>

<p>The Ivies didn't give athletic or merit scholarships. They did and do give fin aid. In what many of us, including yours truly, regard as the "good old days," the Ivy Group got together after admissions decisions were made and compared fin aid offers. The idea was that each student would get an offer based solely on need. A college that was trying to grant more $ to attract a URM or a star athlete or an Intel winner would get its knuckles rapped. The system worked well, IMO. </p>

<p>It was the Reagan administration that attacked the system--which was open and notorious, not hidden. If memory serves me, it was MIT which tried hard to fight. The others thought the decision was wrong but didn't feel like spending millions to defend the law suit. The Ivy Group had to sign a consent decree which prevented them from comparing offers. (I believe the decree has long since expired, but the Ivies don't compare fin aid offers.)</p>

<p>The fact is that very few colleges have enough resources to give good need based fin aid and merit based aid. Generally speaking, the ones that give merit aid give lousy need based aid. The "word" is, for example, that NYU gives a free ride to any Intel winner but lousy need-based fin aid. </p>

<p>The barriers to the poorest in our nation going on to college are high. When state Us, in particular, use their funds to attract OOS National Merit Scholars, that means that less $ is available to give need based aid to in-state students.</p>

<p>It's probable that there's a direct relationship between the increase in merit scholarships and the increase in the average debt per student and the crushing loan burdens many students have.</p>

<p>I hope merit scholarships continue to be available. There are a large number of students who do need merit aid to attend college despite the fact that they may be judged to have no financial need. When a kid gets an athletic scholarship, does anyone say that they should not get it because the family can afford to pay? Academically talented students bring something to a college just as an athlete does.</p>

<p>An alternative is to add the merit money pot to the financial aid pot, increasing financial aid to levels where more of the middle class is covered. Then it's a zero-sum game, the same total amount of money being distributed more equitably, keeping it out of the hands of the truly well-to-do.</p>

<p>The truly well-to-do probably aren't filling out financial aid applications, in the first place.</p>

<p>Good point, they're getting available money without even asking. :(</p>

<p>How are we going to define "truly well to do?" Is it someone making 300K a year even if they've only had that salary for 2 years vs 10 years? Is it someone with a salary of 150K who lives in Arkansas, but not if they live in NYC? How about keeping athletic scholarships out of the hands of the truly well to do?</p>

<p>I think merit aid serves several key purposes. First, it lets colleges target the kinds of students they want. They can set their own rules, and chase only those students who meet the school's needs.</p>

<p>Most importantly, it rewards high achieving students and enables them to attend schools they often would be unable to attend. "Students who aren't needy" doesn't mean much in real terms. A student with a calculated EFC of $30K might not qualify as needy, but a $30K tuition bill may be impossible to meet without major loan debt. The reason for the high EFC could be a non-contributing divorced parent, or the family's assets may be illiquid. Or, even if the family could write an annual $30K check, perhaps a rational economic analysis suggests that a good state school at $12K is a better value than the $30K private. Regardless, the only way that non-needy, high-achieving student will attend that school is with the merit aid. Trying to stamp out merit aid will ensure that only the super-needy and truly wealthy attend some schools.</p>

<p>If colleges had done an amazing job of controlling costs, I might have more sympathy for their current budget challenges. In fact, tuition costs have risen faster than inflation every year for 30 years. A college that, starting in 1980, never raised tuition at a faster clip than the consumer price index would be so inexpensive (by comparison) today that they wouldn't need to offer merit aid.</p>

<p>"In fact, tuition costs have risen faster than inflation every year for 30 years."</p>

<p>They must! Colleges are almost completely labor intensive; their product cannot be manufactured overseas. So much of what we buy from overseas has kept inflation low.</p>

<p>Just move the merit aid money to the need pool and more middle class kids will be covered, because those without need won't be sucking it up.</p>

<p>Individually, merit aid makes sense. Systematically, not at all: if our nation is a meritocracy, than merit aid lacks a purpose. It rewards those whose children are able to go to the better schools, who are able to take test-prep classes to score high on the PSAT. Every child ought to have an equal chance, equal resources to get into the top colleges: they don't because typically less well-off people live in certain areas, and so have schools with less money, in addition to not being able to do as many enriching activities. Those who beat the odds should be given every opportunity to exceed.</p>

<p>Why should low-income students at my state university, who had the odds stacked against them in achieving as much academically as others, have to go into debt so that those whose parents paid for the PSAT prep classes can go for free? A difference of one point on the PSAT, which test prep classes will compensate for, can be the difference between going into debt for college and not. Really, people who can pay should go for free, leave without debt, despite them having a huge safety net in the case where they fail to pay off their debt, while those who have no safety net should be required to pay extra?</p>

<p>People who want merit-aid scholarships IMO wouldn't go to a lesser-ranked school JUST for the money...In honest truth, it still is about affordability.</p>

<p>Besides, things like this are, ironically, democratizing higher education: Not all the "elite" students are going to HYPS anymore...Other schools are becoming better as well.</p>

<p>chsowlflax17, I find it strange that you focus on test prep...as personally it seems one of the most useless things I've ever encountered. Never used it, did wonderfully on all standardized tests. However, I otherwise see your argument. I am exactly the student you describe, who was raised in the correct environment at the right schools to do well academically that could afford it. I would counter argue, however, that less stellar schools need to give merit aid to attract top candidates. I go to Arizona State, definitely considered a less than stellar school, on a large merit scholarship. I would most certainly not be there without, instead attending my state flagship, University of Wisconsin, considered a much better school. Without merit aid, schools like ASU would attract far fewer top students. Not only would OOS students like myself not attend, but more in state students would go out. And maybe stay there. It's important, at least for state schools, to attract top people to their states, and well as keeping their own people.
Furthermore, financial aid is based on parental income. Often parents either won't pay, or will pay a limited amount. Often, despite what is seems, they can't pay, for a variety of reasons. If I have a certain amount of merit scholarship, and another person has the same amount, and out parents either can't or won't pay, we emerge in the same amount of debt.</p>