Need based versus Merit based Aid

A college education does not come cheap, and the cost of a higher education only seems continue increasing, making it difficult not only for low income and minority students to afford, but for middle-class families as well. Because of the extensive costs involved with paying for college, the federal government and many institutions offer financial assistance to low-income individuals; however, in the past decade much of the need-based aid has been replaced by merit based scholarships. Need based aid, such as student loans, allows for minority students who would normally not be able to afford college to receive a higher education, while merit based based scholarships take away from need-based aid and reward students for good grades. The question to answer is which is more important, need-based or merit? Merit based aid is a huge benefit for middle class and even some upper class families and has shown to be a motivator for students to do well in school, but most low income and minority students do not have the grades to receive merit based scholarships. Merit based aid also takes away from loans that need based aid students would receive and makes it even harder for them to attend college, decreasing the already low percentage of low-income and minority students that attend college.

"Only 7 percent of high-school sophomores from the lowest quartile of socioeconomic status eventually earn a bachelor's degree, compared with 60 percent of those from the highest quartile," according to Associate Professor of Public Policy Susan M. Dynarski and doctoral candidate Judith Scott-Clayton, both at Harvard. "Only 12 percent of Hispanics and 16 percent of African-Americans eventually earn a B.A., compared with 33 percent of non-Hispanic whites." Moreover, the gaps persist "even among well-prepared students," so difficulties paying for college are at least partly to blame, the researchers say.

Obviously most middle class and upper class families would find merit based aid a more substantial option, while lower class families and minorities lean towards student loans and need based aid. There is a group for of higher-education professionals, policy experts, and researchers called the Rethinking Student Aid study group who have been working for the past two years to create a set of proposals to simplify and improve the federal student aid system. Their latest report expresses the importance of providing financial assistance to families of lower incomes than those of higher incomes as well as well as recommending simplifying federal grants and tax benefits, giving loan subsidies to students during the repayment period, providing federal savings accounts to children of low-income families, and rewarding states and institutions for the success of low-income students in college.