Report Highlights Financial Aid Discrepancies

Those who think that working hard in school and earning good grades are enough to get a student to college are apparently mistaken. According to a report by the Advisory Committee on Student Financial Assistance to the United States Department of Education, many low-income students’ needs for financial aid are going unfulfilled in two-year and four-year state colleges as well as four-year private colleges.
The committee’s findings indicate that not only has the growing need for financial aid for these students gone unmet, but also that the national average financial aid package is larger for students from middle-income families than for those from low-income families. This is true for state universities as well as for private universities. 
Oberlin, however, does not fit the national average. According to Brian Lindeman, director of Financial Aid, “Over 90 percent of aid is awarded on the basis of how much a student needs. At Oberlin, we meet 100 percent of need.”
The Financial Aid office takes into consideration a variety of factors, including family income, then calculates expected family contributions, and determines how much it expects a student to contribute toward tuition. The remainder is made up in grants or loans. 479 Oberlin students are here on Pell Grants.
Though Oberlin does not match the national standard of unmet needs, the application process itself is not completely need-blind. In 1994-1995, Oberlin switched to a need-sensitive application process. This means that an applicant can be accepted based on the ability to pay more of the tuition than another applicant. According to Lindeman, however, the application process is need-blind until the very last applicants are being considered, when the process becomes need-sensitive.
According to the advisory committee’s report, socio-economic status plays more of a role in determining whether or not a student goes to college than actual academic preparedness does. A 1997 Department of Education study tracked the percentages of highly qualified high school graduates who enroll in a four-year institution. The study revealed that 66.9 percent of qualified high-income students went on to a four-year institution, whereas this was true of only 47.1 percent of qualified low-income students. 
When racial information for highly qualified students was examined, the study revealed that 60.6 percent of caucasians joined four-year institutions, whereas only 44.3 percent of Hispanics and 28.3 percent of African-Americans joined four-year institutions. This racial disparity occurs because these minorities are, according to the report, “disproportionately represented among low-income students.”
The report also states that since 1970, the cost of a public institution as a percentage of family income has only increased for low-income families. For high-income families, the cost has remained steady at less than 10 percent of their income. For middle-income families, this percentage has remained at between 10 and 20 percent of their income. For low-income families, however, whose real income has not increased as dramatically, the percentage has increased from 42 percent in the early 1970’s to 62 percent in 1999.
However, financial aid to low-income families — for example scholarships such as Pell Grants — have not increased in the past 30 years to match the increasing cost of tuition. This means that the buying power of the Pell Grant has declined severely. While in 1975-1976, a Pell Grant maximum would pay for 84 percent of a public institution’s tuition, today, it pays for only 39 percent. A modern Pell Grant pays a maximum of $3,300. This means that to restore the buying power of the Pell in 1975, the maximum would have to be raised to $7,066 for four-year public institutions, and $8,564 for private institutions. 
In addition to the failure of federal aid to keep up with rising costs of tuition, states are allocating more money to merit-based scholarships, drawing funding away from need-based aid. In 1982, 9.6 percent of state scholarships were merit-based. By 1998, that number had risen to 18.6 percent. According to the report, the relations between the federal government, state governments, and institutions, which were once strong, have deteriorated, leaving low-income students behind.


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