Student Financial Aid: Who Deserves it?

Rachel Rosencrans

Mr.Reuter

Economics

14 February 2017

Student Financial Aid: Who Deserves It?

Let’s face it; college is expensive. Students walk away with a degree and a large debt. They are not even guaranteed a job to pay off that debt.  This video explains the impact of student debt. People say college is an investment.  But who should we invest in?  Government aid has typically been given to students from low income families. However, in more recent years, a debate has begun about whether financial aid should be given based on need, like in the past, or based on merit.  What makes one hard working student more deserving of financial aid than another hard working student?

Merit based aid would help middle class families with above average students to pay for the rising price of college.  As of 2012, the cost of college “has more than doubled nationally over the past 10 years at four-year public colleges” (Levits). These students who received high grades and SAT/ACT scores are being rewarded for their hard work.  It is expected that these students will also be more successful during college due to their previous work ethic and dedication to academics. Investing government money in the education of these individuals is investing in our future leaders.

The counterargument to merit based aid is, of course, need based aid. The argument is that need based aid will help young adults to break from the poverty in which they were raised. Without this aid, these students would not be able to attend a university.  Also, the reason that these students may not have the same high level of academics as other students could be due to the fact that they have to help support their family. Students who have to work full time, go to school, do their homework, and God forbid, sleep, won’t do as well in school as other students who have more time to relax their minds and still complete all of their homework. By allocating more money to students who succeed in school, "’The money is being slowly taken away from the students who need it most,’ says Shannon McGhee, the associate director of financial planning at Mercer University, in Macon, Ga. She says African-American and Hispanic students are most likely to benefit from need-based plans because ‘they have not necessarily had the same educational opportunities as their white peers’” (Levits).  These students could have worked just as hard or even harder than the high achieving students had they been in a different economical situation at home during their high school years. Need based aid attempts to eliminate this problem by breaking the cycle of poverty so that these students can eventually raise children who don’t have to wonder where their next meal is coming from, but can focus on their studies.

As the cost of college continues to climb, it is difficult to decide who should get financial aid when it seems like everyone could use it.  However, everyone has to make trade offs.  The opportunity cost of giving one student money for college is that another deserving student cannot use that money for college. The more need based aid given, the less merit based aid that can be given.  This concept can be demonstrated by a production possibilities curve as shown in the picture below.  Overall, it is hard to decide who gets to leave college with less debt when there are a lot of different types of people in different financial situations that deserve the aid for different reasons.  Please leave a comment with your thoughts about the issue and which group of people you believe should get more aid financially and why.

Works Cited

Levitz, Jennifer, and Scott Thurm. "Shift to Merit Scholarships Stirs Debate." The Wall Street Journal. Dow Jones & Company, 19 Dec. 2012. Web. 13 Feb. 2017.

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