Financial Aid Programs, Access to Higher Education
UNIVERSITY PARK, Pa. — In the early part of the 20th century, most Americans thought higher education was reserved for the wealthy elite. That all changed when the GI Bill of Rights was passed in 1944 and almost eight million veterans took advantage to attend college.
The law created access for a whole group of people who never thought they could afford to attend college. The same thing happened 20 years later with the passage of the Higher Education Act of 1965 and its reauthorization in 1972.
Since 1980, however, tuition rates have steadily climbed while financial aid programs have not kept pace. Need-based financial aid programs, which concentrate their dollars on students from low-income families, have often fared especially poorly.The result has been a shrinking of the opportunity gap for low-income students to attend college. Studies have shown that the No. 1 concern for low-income students is the price, specifically how to pay for rising costs, of higher education. Two professors in Penn State’s Center for the Study of Higher Education have conducted research on the subject. John Cheslock, associate professor of education and director of the Center for the Study of Higher Education, and Liang Zhang, associate professor of education and senior research associate, have each written on the subject.
In his working paper “Filling the Gap: The Use of Intentional and Incidental Financial Aid to Meet Need in Higher Education”, Cheslock, and co-authors Rodney Hughes, Rachel Frick-Cardelle and Donald Heller, examine the grant awards provided to students by colleges and universities and develop a new typology for describing these awards.
Their research highlights how incidental need-meeting aid (which is not designed to offset a student’s need but regularly does so in practice) helps meet a substantial share of the need that students face, but is much less effective than intentional need-meeting aid (which is designed with need in mind) at targeting funds on those students who have the highest levels of need.
“The financial aid provided by colleges and universities is extraordinarily complex as a range of motives drive these awards. Some grants are designed to promote access for low-income families, other grants are designed to attract students with specific skills (e.g. strong academic preparation) to campus, and a final set of grants are designed to increase revenue in the same way that coupons and early-bird prices do,” noted Cheslock. “Trying to sort out how these range of awards affect the prices that low-income students pay is a difficult task, and our new classification system seeks to make that task simpler.”
In a separate 2013 study — “The Effect of Florida’s Bright Futures Program on College Enrollment and Degree Production” — Zhang and co-authors Shouping Hu and Victor Sensenig examine the effects of Florida’s program that rewards high school graduates for high academic achievement.
Although the awards from these programs are not targeted on low-income students, they could still reduce the cost for some as the award criteria are relatively broad: Students with a 3.0 grade-point average and who score a 970 on the SAT qualify. Approximately 60 percent of all high school graduates within Florida who took the SAT meet those criteria.
Zhang and his co-authors find that program did alter the number of Floridians who remained in-state as it encouraged some to attend college and others to choose an in-state, rather than an out-of-state institutions. The enrollment of students from lower-income families appeared to be affected similarly as the enrollment of other students.
“The federal government, state governments, and colleges and universities are facing difficult financial futures, which could lead to less spending on financial aid,” Cheslock said. “An understanding of how well-targeted financial aid programs, as well as less-well-targeted but more politically popular programs, influence the prices and enrollment decisions of low-income students will help us identify the impact of any future cuts.”
by Andy Elder (January 2015)