Journalism Fail: Weissmann on financial aid.
In a recent article for the Atlantic (linked yesterday on Skepchick), Jordan Weissmann makes the provocative argument that a number of colleges and universities have put in place financial aid systems that effectively bilk lower-income students while lavishing funds upon the already-wealthy. Those of you that have followed my writing on School of Doubt may remember that personal experiences have led me to take more than a passing interest in issues of tuition and accessibility in higher education, so I thought I would take a good look at Weissmann’s argument to see what he had to say.
At first blush, Weissmann appears to build a convincing case for his central thesis, which is roughly that many private and some public schools spend a disproportionate amount of their discretionary financial aid budgets on “merit” scholarships as a means to entice more affluent students to attend their schools, and presumably to pay higher tuition. Of course, Weissmann frames it with a bit more pizzazz. Here he is quoting a report by Stephen Burd of the New America Foundation, whose research forms essentially the entire argument presented in the article:
And here’s the key bit: Many colleges, [Burd] argues, appear to be playing an “elaborate shell game,” relying on federal grants to cover the costs of needy students while using their own resources to furnish aid to richer undergrads.
This is, of course, a bit of a red herring as stated. Schools would of course be inclined to use Pell Grant money before any other funding in their financial aid packages for neediest students, since such funding is guaranteed to all qualifying students. These students accounted for 27% of all US undergraduates in the 2007-8 academic year, according to this 2011 brief from the US Dept of Education. (You might want to open that brief in a new tab).
So what Weissmann is really saying here is that some colleges and universities also provide discretionary financial aid to students who do not qualify for Pell grants, which is true. According to this, the average Pell grant recipient in 2007-8 had a median annual family income of $15,223 (mean $20,302). And this page from the College Board brings up a couple of helpful statistics:
In 2007-08, about 66% of dependent undergraduates from families with incomes below $30,000 — and about 83% of those who applied for federal financial aid — received Pell Grants. (About 20% of dependent students were in this income range.)
Fifteen percent of dependent undergraduates from families with incomes between $50,000 and $59,999 — and 25% of those who applied for federal financial aid — received Pell Grants. Less than 1% of the 55% of dependent students from families with incomes of $60,000 or higher received Pell Grants.
So we see already that there a whole lot of students who can’t afford to pay $25-40k per year in tuition and fees but still don’t get federal grant money. I’d bet they’re pretty grateful when they receive institutional aid.
Of course, Weissmann could still be correct in his thesis that a disproportionate amount of this discretionary aid is directed to wealthier students through merit scholarships, so let’s see how he gets there.
As it turns out, he starts right out of the gate by uncritically parroting a major factual error from the Burd report:
The [Burd] study notes that, according to the Department of Education’s most recent study, 19 percent of undergrads at four-year colleges received merit aid despite scoring under 700 on the SAT. Their only merit, in some cases, might well have been mom and dad’s bank account.
Burd’s study does indeed say that, on page 3:
The term “merit aid,” moreover, is often a misnomer, as these funds don’t always go to the meritorious.  According to the NCES report, 19 percent of freshmen at four-year colleges who had SAT scores ranging from 0 to 699 received merit awards from their schools or states, as did 27 percent of those with scores from 700 to 999. In addition, 20 percent of those who had grade point averages of less than 2.0 received this assistance as well.
The trouble is, this is not true. You see, the NCES report statistic cited is not for all undergraduates, but for all undergraduates receiving some form of grant aid (approximately 64% in total). You can look at the nice graphic on page 7 of the report you opened in the next tab if you don’t believe me.
Thus all we can safely say based on the given numbers is that of students with low SAT scores who nonetheless went to a 4-year college full-time and also received financial aid, 19% received some kind of merit aid. These categories are not mutually exclusive, either: a student receiving both merit-based and need-based aid would count toward both columns. The survey also counts merit-based aid from all sources (including states and private scholarships), not just merit-based institutional aid, so it is essentially impossible to use this data point to support Burd’s/Weissmann’s case.
It is also worth noting (as Weissmann doesn’t) that this score refers to the old SAT format, which was out of 1600 and not 2400 (min. score 400). In fact it’s a bit odd that it counts 0-699 unless it includes students who didn’t take the test at all. For the record, this Chronicle article misreads the same statistic in an entirely different way, claiming even more preposterously that nearly 20% of all merit aid recipients scored under 700 on the SAT.
There is, to be fair, a little data point earlier on in the NCES brief that offers some weak evidence for the Burd hypothesis, though Burd himself doesn’t use it. Between 1995-96 and 2007-8 the distribution of merit-based aid shifted slightly from the lowest income quartile to the highest, going from (low to high) 23-26-28-23 in ’95-’96, to 20-24-29-28 in ’07-’08. Thus there is some evidence that merit-based grants have shifted slightly in their distributions, though the fluctuation in the numbers presented doesn’t support a strong linear trend (see page 6 of that NCES brief), and again the report refers to all aid and not institutional aid. Honestly given the institutional barriers for lower-income students, I have to admit I’m quite impressed by how fair the distribution turns out to be!
Weissmann’s (or really Burd’s) final argument has to do with the effective tuition paid by low-income students at what he calls “high-Pell, high-net-price” schools–schools that have a lot of students who qualify for federal grants but who nonetheless end up paying more than $10k/year in tuition and fees (N.B. this “out-of-pocket” expense includes loans; both Weissmann and Burd only consider grants when talking about “aid”).
At Georgia’s Berry College, 30 percent of students receive Pell Grants, and low-income students pay an average net price of $16,174. Yet 25 percent of its freshmen also receive merit aid, averaging more than $10,000 a piece.
At Wabash College in Indiana, 28 percent of students receive Pell Grants, and low-income students pay an average of $15,480. Yet 12 percent of its freshmen get merit aid, averaging $15,393 each.
At Case Western Reserve, one of the better known institutions among the high-pell, high-net-price schools, 23 percent of students receive Pell Grants grants [sic], and low-income undergrads pay $18,381 on average. And yet 19 percent of freshmen also receive merit aid, averaging $18,359 each.
What Weissmann wants readers to see (I assume) are pairs of big numbers that show “poor” students are paying tons of money while “rich” students are getting floated mad cash. Of course, these numbers don’t actually tell us anything useful about funding distribution since they compare across categories. What does it mean to compare a low-income student paying $16k in tuition to the average merit-aid recipient receiving $10k in aid? Nothing at all! Let’s see what happens when we compare all the numbers (extrapolated from total tuition fees and the numbers given by Weissmann) for these three schools instead:
Tuition and fees: $26,090
%Pell grant: 30
Average aid for low-inc: $9,916
Average paid by low-inc students: $16,174
%Merit aid: 25
Average merit aid: $10,654
Average paid by merit students: $15,436
Tuition and fees: $32,450
%Pell grant: 28
Average aid for low-inc: $16,970
Average paid by low-inc students: $15,480
%Merit aid: 12
Average merit aid: $15,393
Average paid by merit students: $17,057
Case Western Reserve University
Tuition and fees: $39,120
%Pell grant: 23
Average aid for low-inc: $20,739
Average paid by low-inc students: $18,381
%Merit aid: 19
Average merit aid: $18,355
Average paid by merit students: $20,765
In this case, Weissmann counts as “low-income” students from families earning less than $30,000/year, far higher than the annual income of the average Pell grant recipient. So what have we learned from this exercise in filling in the missing numbers?
In two of the three examples, low-income students receive on average a couple thousand more dollars in grant aid than do students with merit awards (Berry is the outlier, where need-aid students pay on average $600 more). In all cases Pell grant recipients outnumbered merit aid recipients as a proportion of the student body, and we should remember that only 2/3 of low income students as defined here qualify for Pell grants (max $5500) in the first place. Lastly, of course, Burd and Weissmann never specify that all the aid received by the low-income students is need-based; they only tell us what low-income students end up paying on average after aid from all sources. Conversely, they do not specify what proportion of merit-aid students also receive some need-based aid, even though we know that approximately 20% of merit recipients are in the lowest income quartile.
We are faced with a false dichotomy at the very heart of the issue: Burd and Weissmann have framed their whole argument in terms of need-students vs merit-students, but we already know (thanks to that NCES brief) that low- and high- income students receive roughly equal portions of merit aid. With no means to account for this huge overlap (nor any acknowledgement of its existence), there is simply no way to prove the thesis with the evidence they present. Frankly, given the (willful or negligent) manipulation of the NCSE report data in the source study and Weissmann’s failure to fact-check it, I am inclined to doubt the methodological rigour of the whole project.
Do schools use merit scholarships to bait rich kids into paying tuition at the expense of poorer students? Possibly, in some situations, if some of the anecdotal evidence presented in this Times article is to be believed. Has the practice been proven to be a widespread, systemic problem? Absolutely not. All we really can conclude from the data presented is that the schools Burd and Weissman highlight as the worst offenders give out on average substantially more need-based aid than merit aid, that students receiving either kind of aid still have to pay too much money in tuition fees (either through loans or out of pocket), and that merit-based aid is fairly equitably distributed across income levels (if slightly skewed to the top).
Would I love to see a good, thorough, rigorous study that actually answers the proposed question? Hell yes! But this one isn’t it, and it’s a major journalistic failure on Weismann’s part to pass it on to the public as he did, complete with misleading and incorrect information. I only wish we could expect better of our journalists, but alas I’ve read enough of these thinly veiled press-releases to know better.
Featured image: Flickr user Tax Credits