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Keeping up with the Joneses: Institutional changes following the adoption of a merit aid policy

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  • Griffith, Amanda L.

Abstract

The increasing use by private colleges and universities of financial aid based on "merit", as opposed to based solely on financial need has caused many to raise concerns that this type of aid will go mainly to higher income students crowding out aid to lower income students. However, some analysts suggest that by attracting more "almost full-paying" students through the use of merit aid, institutions will have more financial resources that they can use to increase their financial aid to low-income students and thus their enrollment. Results using data from the College Board's Annual Survey of Colleges and other secondary data sources suggest that the increased use of merit aid is associated with a decrease in enrollment of low-income and minority students, particularly at more selective institutions. Middle and bottom tier colleges may be offsetting costs with tuition increases, as the introduction of merit aid is accompanied by an increase in net costs.

Suggested Citation

  • Griffith, Amanda L., 2011. "Keeping up with the Joneses: Institutional changes following the adoption of a merit aid policy," Economics of Education Review, Elsevier, vol. 30(5), pages 1022-1033, October.
    • Handle: RePEc:eee:ecoedu:v:30:y:2011:i:5:p:1022-1033
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    References listed on IDEAS

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    Cited by:

    1. David E. Frisvold & Melinda Pitts, 2018. "State Merit Aid Programs and Youth Labor Market Attachment," NBER Working Papers 24662, National Bureau of Economic Research, Inc.
    2. Ozan Jaquette & Edna Parra, 2016. "The Problem with the Delta Cost Project Database," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(5), pages 630-651, August.
    3. Jonathan Smith & Matea Pender & Jessica Howell, 2018. "Competition among Colleges for Students across the Nation," Southern Economic Journal, John Wiley & Sons, vol. 84(3), pages 849-878, January.
    4. Beth Mintz, 2021. "Neoliberalism and the Crisis in Higher Education: The Cost of Ideology," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(1), pages 79-112, January.
    5. Dennis A. Kramer & Justin C. Ortagus & T. Austin Lacy, 2018. "Tuition-Setting Authority and Broad-Based Merit Aid: The Effect of Policy Intersection on Pricing Strategies," Research in Higher Education, Springer;Association for Institutional Research, vol. 59(4), pages 489-518, June.
    6. Eun Jeong Heo, 2023. "Financial aid in college admissions: need-based versus merit-based," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 60(1), pages 265-297, January.

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