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Do State Academic Merit Scholarships Discriminate Against African Americans?

Do State Academic Merit Scholarships Discriminate Against African Americans?
By Kenneth E. Redd

One of the biggest concerns for many families is how they are going to pay their children’s college expenses. In the academic year 2002-2003, the average cost of attendance at four-year public colleges and universities was more than $9,100, while the average price of attendance at private institutions was almost $21,700, according to the College Board.

Concerns are even greater for African Americans who enroll in college at lower rates and generally have less income available to pay college costs than Whites. A number of states have responded to families’ anxiety about rising college prices by instituting academic merit scholarship programs, which use high school grades or scores on standardized tests to award state-funded grants to students entering higher education. Supporters of state-based merit aid believe these scholarships encourage hard work in high school, reward meritorious academic achievement and increase college-going rates for all students. But there is mounting evidence that merit awards do little more than provide additional scholarship funds to middle- and upper-income White students at the expense of college access for low-income African Americans.

State merit scholarships represent a relatively new approach to student financial assistance. Traditionally, state grants have been awarded to students based on their financial need, with those from the lowest-income families generally receiving first priority for funds. However, state merit aid has grown very quickly. Between 1995 and 2001, total state spending on merit and other “non-need-based” grants jumped 134 percent, while funding for “need-based” scholarships grew only 26 percent. The largest state merit aid program, Georgia’s Helping Outstanding Pupils Educationally (HOPE) Scholarship, distributed more than $225 million to Georgia students in academic year 2000-2001. Two other large merit scholarship programs include the Florida Bright Futures Scholarship, which awarded $165 million, and the Michigan Merit Award Scholarship Program. While funding for merit grants grew quickly, the gap in college attendance between White and Black Americans remained large. The College Board reports that about 56 percent of African Americans aged 16 to 24 in 2000 were enrolled in postsecondary education, compared with 64 percent of Whites.

Policy-makers in Georgia, Florida and Michigan hope the criteria they have established for awarding merit grants will increase the college-attendance rates of all students by encouraging academic achievement. To receive a HOPE scholarship, Georgia high school graduates must have at least a B average in core curriculum courses. To receive an Academic Scholars award under the Bright Futures program, Florida’s graduating high school seniors must have at least a 3.5 grade point average, plus a minimum score of 1270 on the SAT or 28 on the ACT. In Michigan, awards are distributed based on students’ scores on the Michigan Educational Assessment Program High Schools Test. In all cases, grants are awarded to students regardless of their families’ income or financial need.

Higher-income White students generally have access to better high schools and college admissions test preparation materials, and recent research on the Georgia, Florida and Michigan programs make a strong case that these factors make the award criteria used to distribute merit grants favor wealthier White students at the expense of low-income African Americans. Dr. Donald E. Heller, an associate professor at Pennsylvania State University, has found that in 1998, White, non-Hispanics accounted for about 61 percent of Florida’s high school graduates, but represented 77 percent of Bright Futures scholarship winners. On the other hand, nearly 22 percent of Florida high school graduates were African American, but these students accounted for less than 10 percent of the Bright Futures recipients. In Michigan, African Americans constituted 14 percent of the high school graduates, but represented just 8 percent of merit scholarship winners.

Additionally, state merit grants appear to have done very little to encourage students from low-income families to attend college. Despite Georgia’s large investment in merit aid, the proportion of students from low-income families — those most likely to be from African American and other racial/ethnic minority groups — who participated in postsecondary education in the state actually declined by 4.1 percentage points between 1999 and 2001, according to data from the August 2002 edition of the Postsecondary Education Opportunity newsletter. In Florida, college participation among low-income students fell 6 percentage points. The slowdown in the states’ economies certainly had an adverse effect on the college-going rates of those from low-income families, but the fact that much of the state grant funds were directed toward students from upper-income families surely did not help to reverse the negative trends.

To make matters worse, while African Americans may be less likely to benefit from state merit awards, they are more likely to provide the dollars needed to fund these scholarship programs. Georgia, Florida and several other states that have merit programs use state lotteries to fund the student awards. Economics professors Drs. Christopher Cornwell and David Mustard at the University of Georgia recently completed a study on the characteristics of Georgia residents who purchased state lottery tickets. They found that, in the 32 Georgia counties with the highest per capita income, the lottery sales per capita was about $219. In the poorest counties, lottery sales were $308 per capita. In the 32 counties with the largest African American population, lottery sales were $402 per capita; in the counties with the smallest Black population, lottery sales were just $201 per capita.

In other words, the Georgia counties with the largest number of low-income and African American citizens spent much more on lottery tickets than residents of counties with the largest number of high-income and White populations. Because low-income African Americans are much less likely to go to college and are less likely to qualify for HOPE grants than middle- and upper-income White citizens, this means that much of the lottery funds from the poor are being used to subsidize HOPE scholarships for the middle- and upper-classes.

The impact of state merit programs also is limited because the scholarships generally target traditional-age students who enroll full time in postsecondary education directly after high school graduation. Today, these students represent less than one quarter of the college population. The majority of students — particularly racial/ethnic minorities — are older, have worked or served in the military prior to entering postsecondary education, and often enroll part time. Very few state financial aid programs address this large (and growing) higher education population.

Unfortunately, the growth in merit scholarships has occurred while the costs of attending college continue to rise. Over the past decade, college prices have risen nearly 40 percent. These rising prices make it even more difficult for low-income students to enter higher education. Yet, Georgia, Florida, Michigan and other states have responded to these concerns by establishing merit scholarship programs that use award criteria and funding mechanisms that direct scarce state dollars away from students with the greatest need and toward those from higher-income families. Merit aid programs have not helped to equalize the college opportunity gaps between Blacks and Whites. Other states considering establishing merit programs should be warned against their potentially discriminatory effects against low-income African American students.

— Kenneth E. Redd is director of research and policy analysis at the National Association of Student Financial Aid

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