Financial aid is the monetary assistance that most families get when they have a college-bound student. It provides millions of students with access to university, college, and trade schools, which later translates to academic success, better career opportunities, and more fulfilling lives. This aid comes in two forms, need-based financial aid and merit-based financial aid. Both types of grants do not require repayment, and contrary to what most people think, not all financial aid is based on financial need. Financial aid is not only offered to the needy students, but it is also offered to the exceptionally talented students and those with high academic achievement.
Need-based financial aid is awarded to students based on their family’s financial need, and it comes in the form of work-study, low-interest loans, scholarships, and student grants, from either the federal government or the state government. In most cases, it is the government that determines who should acquire it and for what reasons. It provides students from poor backgrounds with means to acquire higher education. Merit-based financial aid, on the other hand, does not depend on the financial circumstances of a family, but rather depends on academic performance or other talents and skills as well as contributions of an individual student to the society. This aid comes in the form of scholarships and grants from corporations, schools, and foundations.
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Though both forms of financial aids have advantages and disadvantages, it is crucial to establish the form of aid that has a considerable and significant impact on enrollment rates. To be able to do this, there is a need for a clearer definition of who needs this educational support. Merit-based financial aid has been in existence in the United States of America since the early 1990s, right after the State of Arkansas initiated its Academic Challenge Scholarship in 1991 (Castleman & Long, 2013). Merit-based financial aid is, therefore, better use of funds than need-based financial aid because it provides talented students with an opportunity to excel academically and career-wise. Moreover, its potential benefits have for a long time been ignored since most people believe that need-based financial aid serves more good to society.
Why Merit-Based Financial Aid Is Better
Education is an important aspect of any given society. The ability of individuals to acquire education provides society with means to improve its economic status. In a quest to ensure access to higher education, the United States has seen an increase in financial aid programs which focus on helping students from low income families acquire a higher education (Doyle, 2010). Previously, aid programs used to target students from lower socio-economic class, but over the last few years, dynamics have shifted, and most aid programs are now shifting towards merit-based aid programs. For the last few decades, merit-based aid has been a major goal for scholarship programs. When these programs were initiated in the 1990s, financial aid was awarded even to students with modest academic achievements, not only to the high achievers (Scott-Clayton & Zafar, 2016). According to Doyle (2010), this approach towards financial aid has, however, changed over the few years. When Helping Outstanding Pupils Educational (HOPE) scholarship program was initiated in 1993, the dynamics of merit-based aid changed. Only students who could maintain a high academic score and those whose family income was below a certain level could be awarded scholarships. Current trends indicate that merit-based scholarships have recently gained popularity, with a high number of private colleges giving out grants to more than 80% of first-year students and covering at least 53% of tuition fees (Scott-Clayton & Zafar, 2016). The two primary goals of merit-based financial aid are the provision of students with college funds and provision of academic progress incentives.
Merit-based financial aid has been shown to improve students' academic progress since it acts as a source of motivation for students, where they strive and work hard so that they can excel academically. Before offering a scholarship or a grant, most colleges evaluate an individual’s SAT, GPA and class ranks (Doyle, 2010). This kind of aid, therefore, acts as a motivator for students, particularly because nearly half of merit-based scholarships go to students with straight As. Studies have established that after the HOPE scholarship program was instituted, high school seniors, as well as college freshmen average, SAT scores significantly increased (Scott-Clayton & Zafar, 2016). In most cases, determination of who qualifies for merit-based aid involves a combination of some actors including GPA, test scores, interviews, and extracurricular activities. This means that students who wish to acquire this type of financial aid should work much harder and produce results that distinguish them from everyone else. Besides motivating students to attain higher grades, merit-based aid also encourages students to become excellent sports players, in addition to becoming outstanding in their talents and skills. Also, a minor determinant that is used in merit-based scholarship is sporting skills.
Students with extraordinary sporting skills have a higher chance of being awarded scholarships, especially by individual colleges because of their contribution to the reputation of that college’s name. Music and artistic talents are also considered when awarding merit-based scholarships to students (Sjoquist & Winters, 2014). Utilizing funds through the provision of merit-based aids to enrol high quality performers in various skill such as performing arts, athletics, and other extra-curricular activities greatly contribute to an institutions success in these particular areas (Carmany, 2018). Therefore, engendering such students has great benefits for an institution, enhances its quality and promotes confidence of different talented students.
Merit-based aid has been shown to have a positive impact on college enrollment, more particularly in four-year institutions. According to recent studies, college enrollment, especially among low-income students is significantly affected by merit-based aid (Doyle, 2010). People from different racial backgrounds can attend colleges as a result of this type of aid. This has been associated with the fact that lower priced tuition tends to encourage more college applications.
Moreover, merit-based aid programs have been associated with the transfer of students from two-year institutions to four-year institutions. Concerns that existed a few years ago about minority individuals being unable to acquire higher educations are slowly diminishing and since merit-based aid has been able to increase college accessibility to larger populations. Using funds on merit-based aid has therefore influenced bridging of the gap, which saw people belonging to the racial minority groups left behind concerning acquiring a higher education (Tumwebaze, 2015). Therefore, talented students and high achievers can utilize their talents and acquire higher education, which they can use to empower their communities.
In addition to college enrollment, merit-based scholarships and grants significantly affect college choice and college decisions. If designed properly, these aids have been shown to influence the decisions that students make with regards to college attendance. Experts explain that cost has a great effect on the choice of institutions that most students and their families make (Safier, 2018). Merit-based aid provides an individual with a chance to choose an institution that they would like to attend, contrary to need-based aid programs. Students, in most cases, decide what college they will attend by weighing different multifactorial factors such as readiness, applications, and aspiration as well as associated costs. Merit-based aid programs influence college-attendance decisions by reducing the associated financial costs, that are associated with a majority of relevant institutions (Domina, 2013). Merit-based aid programs in most institutions reduce the estimated costs of attending colleges rather than the actual costs, and when the estimated costs are reduced the students’ odds of choosing that given institutions increases
Besides, in such circumstances where there is a merit-based aid, students are flocked with the question "where do I go to college?" rather than the question "will I go to college?" Concerning college choices, the idea of merit-based need changes the behavior of a majority of high school students and thereby their educational outcomes in the years preceding college choices. Merit-based aid, therefore, influences pre-college outcomes among high-school students in that they become more responsible as they think about higher education pre-figuratively. In this regard, students who tend to think that college education is unaffordable are influenced to achieve academically (Tumwebaze, 2015; Domina, 2013). This raises a desire for college enrollment and as a results students strive to achieve better grades. Moreover, by acting as incentives, students tend to work harder in a quest to meet the merit-based aid criteria.
Previously, people were unable to complete higher education, even after being able to enrol. Merit-based aid has however turned the tables with regards to this and has been associated with promoting degree attainment. In addition to increasing enrolment, it also leads to academic success. A study previously conducted found out that ten years after merit-based aid programs were introduced in the states of Georgia and Arkansas, there was an increased number of people with degrees in both states (Levitz & Thurm, 2012). The fact that merit-based aid encourages more people to apply for college education means that there will be a higher number of people graduating with degrees.
Moreover, these programs recognize academic excellence as well as talents and skills, both of which encourage students to work hard and maintain their high standards. Besides, availability of merit-based aid motivates students to take extra-credits so that they can maintain their aid. This consequently enables students to graduate with degrees because they can take sufficient credits that can lead them to graduation. Therefore, persistence and attainment of a degree are highly influenced by merit based-aid programs. A critical aspect of merit-based aid is that it is possible for a student to lose a particular scholarship if they are identified as underperformers (Sjoquist & Winters, 2014). The positive impacts associated with degree attainment means that merit-based financial aid programs are an important social investment.
The fact that merit-based aid is based on the individual hard work of a student means that it helps create a better society, where students learn to work hard for whatever things they receive in life. Moreover, it creates a culture where people are recognized for their abilities, talents, and skills. It is, therefore, better use of funds since offering aid to individuals who can make the most out of their college life seems like the most reasonable thing to do, especially in the current world where skills and talents dominate societies. It, therefore, helps students nurture their unique skills and abilities as they are also a determinant that is used when providing merit-based aid to students. Additionally, recognizing people due to their accomplishments instills more confidence in them such that they can achieve greater goals in life. One of the major developmental aspects that push individuals towards greater success is recognition of their potential. This has been shown to foster growth career wise and personally and as a result, a much better future generation of young people is created (Safier, 2018). An important aspect of merit-based aid is the challenge that it creates to other individuals in the society, who are motivated to achieve great things in life which can lead to recognition and financial aid.
Arguments from proponents of merit-based aid explain that "when you give someone something that they have not worked for, they will never see its value." With regards to this statement, students who get financial aid as a result of merit treasure and value it and as a result end up utilizing it to the maximum through dedication to studies (Donoghue, 2012). Therefore, making financial aid fully need-based leaves people from poor backgrounds with the ideology that they do not have to work hard since their financial situation will help them get into college. Besides, there are some situations where students who get a chance to attend college through need-based financial aid, and they end up not achieving academically, and some even drop out of colleges (Hadavand, 2017). Though some specific factors may associate this, it is worth noticing that such dropouts could be because these students have minimal value for the financial aid provided to them, simply because they did not work hard to achieve it. This, therefore, therefore, indicates that providing financial aid for students because of what they have achieved is a better way to achieve funds since it creates a sense of value for the scholarship, which motivates the student to maintain the high standards.
Colleges and educational institutions greatly benefit from merit-based financial aids, especially since they attract wealthier students, and as a result, some private institutions rely solely on such initiatives for survival. Moreover, attracting students from higher socio-economic backgrounds means that a smaller merit-based aid will be awarded, contrary to aid offered to the lower socio-economic class, which is usually large. By opting for this type of financial aid, therefore, institutions collect adequate tuition revenue, from which the entire institution benefits. Moreover, dedicating fewer funds to low-income students can be enhanced by attracting students from the higher socio-economic class. Another benefit that institutions seem to appreciate due to merit-based aid is the opportunity to combine competitive peers with lower performing students, which according to studies significantly affects the academic outcome of the less affluent students. Besides, colleges pride themselves by offering grants based on merits, which leads to the formation of strong classes (Johnson, n.d.). Its, therefore, more considerate to utilize funds on financial aid that can benefit the entire institution, rather than financial aid that leaves the institution in a position of only giving and not receiving anything.
It is important to note that though some critics may regard the increasing popularity of merit-based financial aid as a causative factor of reduced need-based financial aid, it might be a method by which most institutions sustain their need-based financial aid program. This is because, with merit-based financial aid, students from the higher socio-economic class may have the capability, or are willing to pay a portion of their tuition money. This consequently leads to the improved financial status of the institution and hence funding programs for needy students can be maintained (Doyle, 2010). A fully need-based program, on the other hand, strains an institution financially, such that it is unable to sustain itself.
Focusing on achievement while granting scholarships and grants reduces a phenomenon known as "brain drain." This is a phenomenon where skilled and talented residents leave a home state. The final reason as to why utilizing funds in merit-based aid rather than need-based aid, especially at the state level, is much better, is associated with the brain drain phenomenon; this is the fact that it leads to the introduction of skilled personnel to a state’s workforce. Introducing a high number of college graduates with extraordinary skills and high academic achievements into a state’s workforce not only guarantees a high level of economic development, but it also puts the particular state at the forefront, where it acts as a model for the other states (Groen, 2011). The fact that merit-based aid affects college attendance means that it affects the outcomes of higher education; i.e., students who successfully finish their education become the role models in that particular state and additionally, they can motivate other young people to work hard.
States strive to retain the brightest and the most talented students within their states through the introduction of state merit-based financial aid programs. Moreover, college graduates have more skills than high school graduates, and their output to the economy of the state is much higher. The socio-economic dynamics of most communities indicate that the higher the number of college graduates, the more developed the state is since there is readily available skilled labor (Burd, 2013). Its, therefore, more beneficial for a state to offer scholarships and grants to individuals who can benefit the state with their skills. State merit-based financial aid programs, for instance, have been able to retain stain residents to a particular considerable level.
Counterarguments
The sole focus of merit-based aid on academic achievement is has a potential of limiting college access for minority groups and students from low-income backgrounds. For this reason, it does not seem fair for those receiving financial aids to be individuals for better backgrounds, who can attend college even without any financial aid. Merit-based aid does not target the needy in the society but rather targets a different population. For example, though the Georgia HOPE scholarship largely affected the access to college by many individuals, though these benefits are not distributed evenly (Levitz & Thurm, 2012). Researchers explain that it widened the college attendance gap, where the large portion of students who benefited from this program, were from the upper economic, social class, while those in the lower and middle economic social classes were left sidelined. Moreover, white students benefited from the program more than African-American students. Again, the impact of this scholarship was not college enrollment but rather college choice.
One important fact that proponents of merit-based aid seem to forget is the fact that low socioeconomic status is in most cases associated with poor academic performance. In this regard, students who live in much wealthier households tend to achieve more academically. Moreover, such students can realize themselves much earlier in life and are therefore at a better position of recognizing any special skills and abilities as well as talents, when compared to individuals from poor backgrounds (Sjoquist & Winters, 2014; Levitz & Thurm, 2012). What this means is that merit-based aid remains only available to academically successful individuals, most of whom do not belong to the lower socioeconomic backgrounds. Therefore, helping students from the upper and middle-class backgrounds leaves a question mark in a society whose ideals are to empower the less fortunate individuals and help them break the cycle of poverty through college education
People with higher education have a higher likelihood of getting a job when compared to people who possess a high school diploma. Besides, being able to attain a degree or a higher education certificate is considered to play a significant role in lifting people out of poverty. Therefore, reducing the ability to propel from low income backgrounds to access higher education limits their capabilities and leaves them without a choice but to continue living in poverty. Critics, therefore, therefore, argue that financial aid should be entirely based on need (Levitz & Thurm, 2012). This is because, without it, the neediest students will never get a chance to fulfill their academic dreams. When considering merit before granting out scholarships, it is important to consider the fact that academic excellence heavily relies on a favorable environment (Donoghue, 2012). Therefore, since needy students come from poor backgrounds, they have little possibility of excelling academically and talent-wise, both of which are determinants of merit-based financial aid. This affects their ability to acquire higher education, and as a result, they remain marginalized.
A majority of the bright students come from backgrounds that are less challenging and which makes academic excellence and excelling talent-wise less challenging. Thus, while merit-based financial need provides talented students with an opportunity to further education, and become more successful, the needy students are left with no chance (Redd, n.d.). Moreover, merit-based aid assists students who would have been able to acquire higher education even without aid.
The fact that need-based financial aid does not depend on scores, academic achievement, and skills make it easy for individuals from low socio-economic backgrounds to be able to acquire financial aid. The only determining factor for this type of aid is financial aid and eligibility is determined by the assets owned by the family of the student. Students with the most need are awarded grants and are given an opportunity to better their lives. It is without a doubt that need-based aid is a "poor students only hope for a better future," considering that without this kind of aid, the poor student may never get an opportunity to study. Given the limited chance of students from poor backgrounds to excel, adopting a merit-based financial aid system not only locks such students out of success but also leaves them with a feeling of self-pity (Safier, 2018). From a philosophical point of view, offering grants to the already capable students cannot impact society more than assisting a poor student can. By all means, to assist means to change lives and for the betterment of the society, it is only logical to help the needy students, by giving them an opportunity to acquire higher education.
The high achieving student, whether they are awarded grants or not have little or no likelihood of failing to attend college. This, therefore, therefore, raises a crucial question, "does it benefit anyone if scholarships and grants are offered to students who have no problem whatsoever getting into college even without financial aid?" It is important to consider that even the need-based financial aid can be adjusted such that a student's academic performance becomes a variable for students in the middle and low income classes. It is, therefore, more beneficial to the society if need is considered more than merit when offering financial aid for students (Scott-Clayton & Zafar, 2016). A point worth noting is the future social impact associated with helping the needy acquire an education; it leads to the creation of a culture of appreciation from those who previously benefited from the need-based financial aid. In turn, such people feel the urge to promote need-based financial aid programs so that they can assist needier students.
Conclusion
Education is an important part of personal growth and economic development. Being able to acquire higher education provides a stepping stone with which an individual can acquire future goals. With college affordability increasingly becoming an issue of concern for most individuals due to increased college costs, the ability to access financial aid determines the ability of a high number of Americans to acquire higher education. Though need-based financial aid offers an opportunity to the highly needy students in the society, it is important to consider the development of programs that assess both needs and academic achievement, such that people who receive grants and scholarships not only need them but also deserve them (Castleman & Long, 2013). Providing aid sorely on financial need is more likely to promote a culture where people from low socio-economic backgrounds only rely on financial aid that can be offered to them because of their status. Merit-based financial aid is, therefore, a much better approach to the use of funds than a need-based approach because it creates a culture of hard work, ensures college persistence and degree attainment and also increases college enrollment among people from minority backgrounds. Through the use of merit-based financial aid, cultural diversity is enhanced, in addition to the accommodation of students from different backgrounds. This not only creates the cohesion of society, but it also enhances an increase in the number of professionals in society. Finally, institutions that decide to use merit-based financial aid should focus on the major goal of the institution, and how such a program serves towards the achievement of the goal.
References
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