COLUMN: More merit scholarships

From Dina Bass', "No Loss for Words," Fall '99 From Dina Bass', "No Loss for Words," Fall '99Last year, the University made what sounded like a revolutionary change in Penn's financial aid policy -- the Trustee's Scholars program, which gives grant-based financial aid to as many as 50 students in each class. With Penn facing severe competition for top students from peer schools -- many of whom sweetened their financial aid deals over the last year -- giving 50 scholarships seems a very limited solution. But Penn is actually making the best of a very limiting situation, particularly given the University's extremely constrained endowment. Applicants divide into three groups with regard to aid. Students who can afford college without any financial hardships and generally choose a college on the basis of its merits; students who do not qualify for financial aid, but cannot easily swallow $30,000 a year for a private college; and students who do qualify for aid. The middle group are often attracted to schools that offer merit-based scholarships over Ivy League institutions. Non-Ivy peer schools -- such as Duke, Johns Hopkins and CalTech -- use a variety of merit scholarships to lure top students. Programs range from 25 scholarships of $17,000 a year to freshmen showing promise at Hopkins to awards from a host of academic departments at CalTech. Duke gives both academic and athletic scholarships. The competition is most acute among highly sought-after groups of students. Every school wants the top student athletes or the most talented musicians. And many fear Penn will lose minority students, since the pool of minority students that top schools compete for is relatively small. Moreover, a higher percentage of minority students are believed to qualify for financial aid or minority merit scholarships, such as the ones Duke has set up. Restricting merit scholarships to students who qualify for financial aid provides a unique solution, allowing Penn to offer competitive aid packages to the students that other schools want the most. But rather than turn to merit-based scholarships, Penn has continued to focus on need-based financial aid. And recently, Penn has fallen behind in its efforts to attract students from this core group as well. Beginning last January, several peer institutions -- including Princeton, Harvard and Stanford -- altered their financial aid practices so as to provide a greater percentage of their aid packages to lower- and middle-class students in the form of grants, which don't have to be repaid, rather than loans. At Princeton, for example, a student whose parents earn under $40,000 now receives his entire package in grants; the percentage of grants goes down for higher income levels, up to $57,000. Although the new aid systems vary from school to school, the result is the same: students at these schools now have to pay back less of their packages than students on financial aid at Penn. Studies show that top students are usually accepted at several of the top institutions and then choose between them. It is only logical that Penn, with its financial aid limitations, will often lose out, certainly among students that cannot easily afford its tuition. With an endowment of $3 billion, compared to Princeton's $4.8 billion and Harvard's $13 billion, Penn simply cannot match their new financial aid programs, particularly as Penn's student body is twice as large as Princeton's and 50 percent larger than Harvard's. But as a supporter of financial aid programs, I don't think switching to a pure merit scholarship system is the answer. Not only does it buck Ivy League traditions, merit scholarships worry me because they can transfer aid dollars from students who cannot afford college to students who meet the merit scholarships' qualifications but have the means to pay their own way. What Penn can do immediately is focus its fundraising efforts on merit scholarships for students who qualify for aid. A football alum could be asked to contribute a scholarship to a student who typifies the ideals of a student athlete, while minority merit scholarships could allow Penn provide packages for minority students that don't fall short of Princeton's. More general merit-based scholarships like the Trustees' Scholars could allow us to turn 50 more of the top students we offer admission to into actual matriculants. Someday, perhaps Penn's endowment will allow us to offer grants to all students under a certain income, but for the time being Penn must stretch its financial aid dollars as far as they can go towards attracting the best students and ensuring that these students don't go somewhere else simply because they can't afford Penn.