This will probably cause some eye-rolling on the part of my local readers, but there’s an interesting article in Inside Higher Ed on the real effect of merit scholarships, which is the term of art for “money given to students for reasons other than financial need.” This is a hot topic, as the article notes:
The rapid growth in merit scholarships has been controversial: Many institutions (public and private) say that the awards allow them to better shape their classes and to attract talented applicants who might otherwise go elsewhere. Yields — the percentage of accepted applicants who enroll — go up. Critics have said that merit scholarships may help institutions, but don’t truly help students (most recipients of merit scholarships have many options) or broad social needs in higher education (the merit awards divert attention and funds from the needs of low-income students). Amid this debate, many institutions are standing by their merit scholarships, while others are scaling them back or abandoning them.
As you might well imagine, hard data on the topic are kind of difficult to find. The article reports on a new study by an economist at the University of Richmond, who actually attempted a controlled study of the effect of merit scholarships at an unnamed institution that may or may not almost rhyme with “Pitchman”:
In his study, [Associate Professor James] Monks took advantage of the decision of a private university to undertake a true experiment with merit scholarships. This university decided to offer $7,000 renewable merit scholarships (about 17 percent of tuition, room and board and fees) to 230 of its top rated applicants. But rather than offer the grants to those at the very top, the institution offered them completely at random to a subset of a larger group of applicants who had been identified as being at the top of the pool of those admitted. The pool excluded those who were receiving any need-based financial aid or other merit scholarships. There were 319 admitted applicants who were thus judged equally desirable as the first group, but who by random choice received nothing extra from the university.
The results? 7.1 percent of those offered scholarships accepted the offer and enrolled, while only 3.2 percent of those who didn’t get money enrolled. That’s a factor of two, and the article calls it statistically significant, so the argument is over, right?
Sadly, in academia, no argument is ever really over, as the effect can be downplayed by noting that even 7.2 percent is a small yield, and it might not be worth the money (not quite $120,000 in this case) to get 16 or 17 top students (amusingly, 7.1% of 230 is not an integer, so something is wonky with the numbers). There was also an attempt made to compare to the previous year (the scholarship offers exactly balanced a tuition increase, so the students getting merit aid were paying the same price as the no-merit-aid cohort the year before), which found a yield of 5.2 percent for similar students. I’m kind of dubious about the comparison– there are too many other factors that vary from year to year for this to be a clear test– but it does suggest something of the natural range of variability of the yield, and that it might be difficult to sort out from the merit money.
It is, however, nice to have some data, however incomplete.