Here Are the Public Universities That Award the Most Non-need-based Aid

A report by the New America Foundation, The Out of State Student Arms Race, is the subject of another post on this site, How Much Should Public Universities Spend on Merit Aid? Although we have some disagreements with the New America report, it contains interesting arguments against the excessive use of non-need-based aid by public universities along with a list of those universities that provide the highest percentages of non-need-based aid to incoming freshmen.

The report would find full agreement from this quarter if it had been produced at a time past, when public universities received most of their funding from state appropriations and could maintain lower tuition rates for all. Now, unfortunately, many public institutions are forced to use merit aid more “strategically,” sometimes as part of the recruitment of out-of-state students and the greater revenue they bring, even after merit funding. To the extent that this use of merit aid works to deny access to merit-worthy, low-income applicants in-state, we do agree with the New America Foundation.

(Please note that separate posts discuss National Merit Scholarship aid, by institution. This post address the availability of all types of merit aid.)

In any event, the list below should be helpful to some parents with FAFSA income levels that are relatively high but that may still be stretched to the limit without non-need-based aid. We are not listing all the public universities on the list, but most of the larger ones are listed. After the university name, we will list the percentage of freshmen receiving non-need-based aid, followed by the average dollar amount of that aid per student. Most of the data is from 2013-2014. Schools where at least 20%  of freshmen receive at least $4,000 in average merit aid are listed in bold.

Public universities below with the highest average per capita merit aid are UT Dallas ($13,766); Alabama ($11,919); Colorado ($9,497); Vermont ($9,283); Arizona ($8,137);  Alabama Birmingham ($8,020); and New Hampshire ($8,020). Please note that some schools may sponsor very high numbers of National Merit Scholars (e.g., Oklahoma), but not provide as much merit aid in other forms. Still other schools (Alabama) fund both NMS aid and other merit aid at generous levels. And then there are the public elites that fund little or no aid that is not need-based.

 

North Dakota–41.73% of freshmen–$1,173 per student

Truman State–40.5% of freshmen–$4,693 per student

South Carolina–39.1% of freshmen–$5,253 per student

Vermont–33.3% of freshmen–$9,283 per student

Iowa State–32.6% of freshmen–$3,049 per student

Miami Ohio–31.3% of freshmen–$8,174 per student

West Virginia–30.7% of freshmen–$2,604 per student

Ohio State–29.9% of freshmen–$6,757 per student

UT Dallas–29.8% of freshmen–$13,766 per student

Auburn–29.6% of freshmen–$5,976 per student

Montana–29.3% of freshmen–$3,250 per student

SUNY Plattsburgh–28.9% of freshmen–$6,237 per student

Clemson–27.4% of freshmen–$7,456 per student

Alabama Huntsville–27.1% of freshmen–$7,494 per student

Oklahoma State–27% of freshmen–$6,291 per student

Colorado–26.9% of freshmen–$9,497 per student

Michigan Tech–26.7% of freshmen–$5,367 per student

Troy Univ–26.5% of freshmen–$5,132 per student

Arizona State–25.7% of freshmen–$7,733 per student

Col School of Mines–25.6% of freshmen–$7,391 per student

Mississippi–25.6% of freshmen–$6,876 per student

Alabama Birmingham–24.7% of freshmen–$8,020 per student

Delaware–24.6% of freshmen–$6,074 per student

Salibury–24.5% of freshmen–$2,127 per student

South Dakota–24.5% of freshmen–$4,505 per student

Southern Utah–24.5% of freshmen–$3,863 per student

Alabama–24.4% of freshmen–$11,919 per student

Arizona–24% of freshmen–$8,137 per student

Kansas State–24% of freshmen–$4,145 per student

Mississippi State–24% of freshmen–$3,527 per student

Iowa–23% of freshmen–$4,115 per student

Oklahoma–22.7% of freshmen–$4,540 per student

Kentucky–22% of freshmen–$7,789 per student

Missouri–21.1% of freshmen–$4,763 per student

Idaho–21.1% of freshmen–$3,133 per student

Maryland–19.9% of freshmen–$6,451 per student

Michigan–17.9% of freshmen–$4,938 per student

Indiana–17.6% of freshmen–$7,671 per student

Minnesota –17.4% of freshmen–$5,875 per student

Kansas–17.4% of freshmen–$3,235 per student

Arkansas-16.3% of freshmen–$4,145 per student

LSU–15.2% of freshmen–$3,233 per student

Alaska Fairbanks–15% of freshmen–$4,306 per student

Tennessee–13.8% of freshmen–$1,571 per student

New Hampshire–13% of freshmen–$8,020 per student

UC Berkeley–13% of freshmen–$4,583 per student

Maine–12.8% of freshmen–$4,030 per student

Connecticut–12.8% of freshmen–$7,045 per student

Rutgers–12.1% of freshmen–$4,300 per student

Massachusetts–11.8% of freshmen–$4,386 per student

Nebraska–11.6% of freshmen–$5,589 per student

Illinois–10.9% of freshmen–$3,980 per student

Rhode Island–9% of freshmen–$6,354 per student

Penn State–7.8% of freshmen–$3,230 per student

Utah–7.7% of freshmen–$7,917 per student

Wisconsin–7% of freshmen–$3,989 per student

Georgia–6.9% of freshmen–$2,019 per student

Florida–5.4% of freshmen–$2,000 per student

Oregon–5.3% of freshmen–$5,207 per student

North Carolina–3.2% of freshmen–$8,393 per student

Univ at Buffalo SUNY–2.6% of freshmen–$6,030 per student

Virginia–2.5% of freshmen–$5,821 per student

Washington–2% of freshmen–$7,000 per student

UT Austin–1% of freshmen–$5,586 per student

 

 

 

 

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How Much Should Public Universities Spend on Merit Aid?

Critics claim that public universities spend far too much on merit aid at a time when the focus should be on providing more need-based assistance, but the uses of merit aid are many, as are the reasons that drive the aid decisions at individual institutions.

The main problem for leading institutions, especially, is how to balance quality, access, state interests (including revenue), and public perception. In general, the most vocal critics of merit aid believe that access should trump all the other factors.

Two recent examples of that criticism come from the New America Foundation: Colleges’ Pursuit of Prestige and Revenue Is Hurting Low-Income Students and The Out of State Student Arms Race, both by analyst Stephen Burd.

First of all, some of the arguments in these and other reports are valid. For one thing, there is no doubt that the U.S. News rankings drive many colleges to spend money on generating better metrics, especially those related to test scores, selectivity, and student/faculty ratios. Some schools have become proficient in gaming the system.

The U.S. News methodology currently gives a combined weight of 9.25% to test scores and selection ratios. The use of the latter should be scrapped, given the increased use of the Common App and marketing geared to ramping up applications just for the sake of lowering acceptance ratios. (As for test scores, there are ways that colleges can game that metric as well.) The methodology also assigns a weight of 22.5% to multiple financial metrics that also pressure colleges to raise and spend more money.

State budget cuts and rising costs for instruction, research, and administration have also led to the need for more revenue. Just how much of the additional revenue is actually necessary for improved instruction is a matter of contention. (See for example Baumol’s Cost Disease and The Bowen Effect.) The combined effects of state disinvestment and the obsession with prestige and rankings have undoubtedly led to the intense focus on increasing revenues.

Yet after granting the critics a fair measure of credit, we come back to the four main factors that affect the allocation of merit aid, discussed below. And here’s a proposed standard for balancing the factors: If merit aid is denied to highly qualified, low-income students who are residents of the state, and goes instead to out-of-state students whose qualifications are about the same or less, then the merit aid is being used excessively for revenue purposes.

Quality–As noted elsewhere on this blog, the elite colleges and universities in this country, almost all of them private, simply do not have enough slots for the top 8-10% of students, based on test scores. Most of the highly talented students who are not accepted by elite private colleges will end up at public universities. Those public universities that allocate funds to support smaller classes and undergraduate research for talented students through honors programs, along with merit aid, are not only spending money to recruit students with higher test scores in order to enhance their prestige; they are also filling a real need by providing more slots for talented students. In addition, many are trying to keep talented students in state rather than seeing them leave, never to return. All too often, critics of public university spending ignore these needs.

Access–The relationship of merit aid to greater access for lower-income students is complex. Rankings and prestige have an impact on merit aid allocations, but that impact is not always what the critics see.

Some elite public universities (UC Berkeley, Michigan) offer higher percentages of merit aid than other public universities that are excellent but not so elite (although the average amounts of merit aid from Berkeley and Michigan are not especially large.) Why? The competition for UC Berkeley and Michigan includes many private elite schools, and sometimes even modest merit aid can be the deciding factor. Private universities such as Chicago, Northwestern, and Rice also offer significant merit aid, and do so to compete with the Ivies, Stanford, etc., who are so much in demand that they don’t have to offer non-need-based aid.

The University of Virginia and the University of North Carolina also compete effectively against private elites, but they have chosen to provide very limited merit aid.

For public universities at the next level, Washington, Illinois, UT Austin, Wisconsin, the competition is often with other publics, and they more than hold their own. Partly as a result of being in high demand regardless of aid, UT Austin has one of the highest enrollments of Pell Grant students and offers little in the way of merit aid.

But when it comes to public universities with lesser reputations than those listed above, the balance between aid for quality or aid for access may tip too far toward quality, sometimes with an eye on improving rankings and revenue. New America singles out the University of Alabama and the University of South Carolina for criticism. How much of this criticism is valid?

State Interests/Revenue–The state of South Carolina now funds only 10 percent of the cost of education at the flagship university. Moreover, the number of college-age students in the state is declining. New America criticizes the University of South Carolina for awarding too much merit aid to out-of-state students, who still end up providing more revenue out of pocket than in-state students, and also help to sustain enrollment levels.

If the university allocated most or almost all of its aid to need-based students within the state, the revenue would drop dramatically and the expense per student would rise. The university would probably be unable to support its excellent honors college; for that matter, the university would eventually be unable to serve as many students period. So even if the state legislature undervalues higher education, the university and many citizens believe it is in the interest of the state to increase the number of college graduates (and their families) over the long haul, and not diminish the university in the process.

Is the percentage of non-resident freshmen (45%) too high, and the merit aid they receive too much? To answer those questions, one would need to know (1) whether many highly qualified (but low-income) in-state students are not receiving aid because the aid is going to out-of-state students with equal or lesser qualifications; and (2) how many of talented out of state students will remain in South Carolina after graduation.  To the extent that highly qualified, low-income, in-state students are losing out, then the out  of state aid should be reduced.

Public Perception–Funding honors programs and offering merit aid to talented students can certainly increase the selectivity profile of a university and eventually enhance rankings and public perception. But we would draw a distinction between the aggressive gaming of the rankings and the more justifiable funding that is related to legitimate state interests. New America suggests that the extremely generous merit aid that the University of Alabama offers to talented out-of-state students is mainly to enhance rankings. But, contrary to what New America claims, the Alabama U.S. News ranking has actually fallen 13 places since 2012.

The University of Mississippi is another flagship that offers generous merit aid. What is also true is that the state of Mississippi has the second lowest percentage of college grads in the nation, and Alabama the 7th lowest. Surely these states should find ways to sustain their flagship institutions, and merit aid, for now, is one of those ways. Who knows but that some day they might join UVA, UNC Chapel Hill, UT Austin, Wisconsin and others that can go forward without so much emphasis on merit aid.

Again, we agree with New America that many universities, including some major public institutions, do use merit aid, at least in part, for purposes of moving up in college rankings and sometimes excessively for revenue purposes. But the total picture is much more complicated, resulting in one of the most difficult issues to emerge from state disinvestment in higher education.

Accepted to All the Ivies and Stanford–Chooses Alabama Honors

Editor’s note: The following article is by Peter Jacobs of Business Insider. We are posting it here because it is a great illustration of the main advantage of many public honors colleges and programs–merit aid for highly talented students that they cannot receive at most private elites.

After some thought and consideration of all the schools’ offers, Nelson decided it wouldn’t be worth the financial strain to use this money on his undergraduate education. He plans on going to medical school after college, and knows he’ll be faced with more tuition costs.

“With people being in debt for years and years, it wasn’t a burden that Ronald wanted to take on and it wasn’t a burden that we wanted to deal with for a number of years after undergraduate,” Ronald Sr. said. “We can put that money away and spend it on his medical school, or any other graduate school.”

University Alabama Quad Denny Chimes Campus

Looking long term, Nelson doesn’t think his decision will impact his chances of getting in to a top medical school or other graduate program. After speaking with his teachers and guidance counselors, Nelson said, he realized that “any undergraduate school can prepare you for a graduate program. It’s just determined on how much work you’re willing to put in.”

At UA, Nelson will be part of the university’s “Fellows Experience” through its honors college. A visit to Tuscaloosa, Alabama, as part of the program’s multiround interview process helped seal the deal for UA. He got to meet other students he would study with over the next four years and was impressed by them.

“It was kind of amazing being around so many like-minded students, which is why I think I’ll be able to have a similar situation [to an Ivy League school], considering the type of students they’re attracting,” Nelson said.

The financial incentive for attending Alabama was high. Due to his high standardized-test scores on the SAT and ACT, UA waived Nelson’s out-of-state fees and covered his tuition costs. Through the fellows program and his National Merit scholarship, Nelson will also have stipends for extra campus costs and potentially studying abroad.

While some people may see his decision to turn down schools such as Harvard, Princeton, Yale, and Stanford as ill considered or shortsighted, Nelson said he’s received a ton of support for choosing UA. One teacher, he told Business Insider, complimented him for “making such an informed decision” about where to work towards his undergraduate degree.

“I’ve had a lot of people questioning me — ‘Why are you doing this?’ — but after I explain my circumstances, they definitely understand where I’m coming from,” Nelson said.

Overall, though, Nelson doesn’t appear to have any regrets about his decision and seems excited to start college in the fall.

“The Ivy League experience would certainly be something amazing, to make these connections, and have these amazing professors,” he said. “But I really do think I’ll be able to make the same experience for myself at the college I chose.”