Colleges and Universities Increasingly Favor Merit Aid

A new report from the National Center for Education Statistics shows that colleges and universities, particularly private institutions, have increasingly used merit aid in an effort to attract students. According to the report, 44% of students in private non-profit four-year institutions received merit aid in 2007-08, compared with 24% in 1995-96. In four-year public institutions, the percentage of students receiving merit aid increased from 8% in 1995-96 to 18% in 2007-08.

In that same time span, the percentage of students receiving need-based aid was relatively flat: the percentage of four-year public students receiving need-based aid increased from 13% in 1995-96 to 16% in 2007-08, while in private non-profit four-year institutions, the percentage actually decreased, from 43% in 1995-96 to 42% in 2007-08.

The report also shows that merit aid awards from state governments are concentrated in the southeastern states. In 2007-08, 23.8% of students in the Southeast received state merit aid, compared with 3.4% in New England and a national average of 9.7%.