Aid in US favours wealthier freshers

February 10, 2006

Universities anxious to rise up America's all-important rankings are spending an increasing amount of financial aid on smart students from wealthy families while financial aid for poor students remains stagnant, according to a new study.

The study found that in seven years the proportion of wealthy students receiving financial aid rose from 35 per cent to more than 51 per cent. The proportion of low-income students who received aid rose much more slowly, from 53 per cent to 56 per cent.

The increase was paralleled by a faster rise in the amount of money received by high-income students compared with the less well-off. In 1992, low and high-income students received the same average award, roughly $5,500 (Pounds 3,150).

But by 2000 awards jumped by $1,300 for students in the top 25 per cent, compared with only $700 for students in the lowest quartile.

Shifting the student aid focus away from low-income students puts them at risk of being pushed out of elite institutions and out of the four-year higher education sector as a whole.

Higher education, long an engine of social mobility, runs the danger of widening already growing class divisions instead of narrowing them.

Kevin Carey, research and policy manager for Education Sector, the independent education think-tank that conducted the study, said universities were offering financial aid to attract students who could improve their rankings in the pre-eminent American league table, US News & World Report's annual guide to the best schools.

"One component of your ranking is the 'academic quality' of your freshman class," Mr Carey said. "And manipulating the financial aid system is a way that universities can shape the character of their incoming freshman classes. People have been very frank about this, and said they are essentially buying students."

Mr Carey said universities were also using more efficient data management systems, similar to those pioneered by airlines, to determine which students bring in more revenue over time. Even after the cost of the aid is taken into account, rich students have been found to provide more net revenue to a university over time than poor students.

"So, particularly for private universities, institutions that are looking after their bottom line, that's definitely one of the components," Mr Carey said. "We're not saying low-income students are getting less. They're not.

But Mr Carey added: "As the cost of higher education continues to increase far faster than the rate of inflation, and to the extent that the financial aid system is less focused on low-income students, the inevitable result is a reduction in access to higher education among low-income students."

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