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Debunking Merit Aid Illusion

June 2019

In a recent report on The Merit Aid Illusion, the American Enterprise Institute takes a closer look at the data relevant to the often-voiced concern that universities in the US are extending more generous grants ever based on merit to students with high-income backgrounds – to the potential detriment to financial support for low-income students. The authors find that increasing merit-based scholarship primarily reflect inflated raises in nominal tuition fees and do not result in decreasing funds for low-income students. In other words, the advertised price is much too high – which begs the question of what kind of students still pay the full Monty. The average per-student subsidy has not deteriorated for lower income quartiles, on the contrary.

What this means for overall affordability of higher education for lower-income Americans, remains quite another matter of course.

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