Debate over need-based and merit-based scholarships

December 28, 2012

In Georgia, need-based scholarships for college have been done away with, in order to dedicate more financial aid for school to merit-based scholarship programs. While this policy has been in place for 20 years, according to the Wall Street Journal, some experts aren't convinced this strategy is fair to students from low-income communities.

"The money is being slowly taken away from the students who need it most," Shannon McGhee, the associate director of financial planning at Mercer University, in Macon, Ga, told the news source. She mentioned that Black and Latino students benefit more from need-based scholarships, as "they have not necessarily had the same educational opportunities as their white peers."

In light of financial problems that burdened the Georgia scholarship program last year, academic requirements for the state-funded HOPE scholarship were raised. The news source speculates that this move will lead to even more financial aid for college going to students whose families may have an easier time affording a higher education than other parents.

Other experts the Wall Street Journal spoke to included Richard Vedder, an Ohio University economics professor and director of the Center for College Affordability and Productivity. He told the news source that he believes, as society outside of academia rewards achievement, the same rules should apply in the competition to receive college scholarships.

Other voices weigh in
While some experts think a combination of need-based and merit-based scholarships may be the best plan, some advocate strongly for one or the other.

For example, an article appearing in the Princeton Review contains a mock test question, which asks, "Two students apply for federal [need-based] student aid - a mediocre student and a high-achieving student. Which applicant will receive a higher reward?" Of the list of possible answers, the correct is revealed to be option "E - Cannot be determined from the information given."

Meanwhile, Daniel Barkowitz, the former Director of Student Financial Aid and Student Employment at Massachusetts Institute of Technology (MIT), blogged that merit scholarships can, counter-intuitively, work against higher-income students with better grades.

Barkowitz noted that merit-based scholarships often include restrictions on where students are allowed to live, and are sometimes offered by schools to students who might be able to enroll at a more prestigious institution. In particular, merit-based scholarships don't make sense at an institution like MIT, he writes, because virtually all students attending are "meritorious."

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