A question of merit. (Financial Aid Watch).

University Business asked financial aid administrators: How do you ensure you don't follow the trend towards increasing merit aid, at the expense of low-income students?

Mark Warner, Director of Student Financial Aid, University of Iowa: "There has been so much negativity about merit scholarships, but the picture is not so simple. If you look at the criteria of the scholarship, not the criteria of the students, about 70 percent of our undergrad scholarships and grants allocated from tuition revenue are awarded by need. But when you look at the 30 percent of the non-need scholarships and looked at the characteristics of the students, 43 percent of them also demonstrated financial need.

"Ten years ago we might have had a 80/20 split, but we've since done things to attract quality students. We developed the National Scholars Award for out-of-state students, the Iowa Scholars award for in-state students, and a valedictorian scholarship--all based on academic achievement, although some recipients have financial need as well.

"Developing a non-need-based scholarship is an involved process. We ask ourselves, 'If we had this program one, three, or five years ago, who would have received the scholarship money? What would the characteristics of those students have been as they related to having need?'

"So when I say that 43 percent of non-need scholarships are going to students who have financial need, that's not surprising. We wanted to be sure we weren't creating a scholarship only for those without financial need."

Cliff Neel, Director of Academic Scholarships & Financial Aid, Baylor University: "For 2002-2003, we had a 38 percent increase in tuition, but we doubled our top three merit scholarships, and we increased need-based scholarships by about 5 or 6 percent. We want to continue helping students with large needs who don't have the academic standing to receive a merit scholarship.

"We saw a drop-off in the neediest students, because they just couldn't afford [tuition]. But we'll increase aid to that group 15 or 20 percent for next year. Even with the tuition jump, our minority enrollment rates have remained the same from 2001-2002. We kept them the same through recruitment and by offering some endowed scholarships.

"Merit scholarships are increasing, that's true, but we are paying attention to both sides of the fence. We have to keep the merit scholarships strong to keep attracting those high academic students, but we want to keep the enrollment up and give those students who don't receive merit scholarships a chance."