Published by The Wall Street Journal
At George Washington University, nearly half of all undergraduates receive the school’s Presidential Academic Scholarship. The prizes go to “the most competitive applicants in the pool,” admissions materials say, and include awards of $5,000 to $30,000 for each student.
At some other colleges, a solid majority of students get similarly hefty scholarships. At still others, virtually everyone gets them.
Hundreds of colleges and universities are using academic scholarships and other merit-based financial aid to gain an edge in a battle for students. The scholarships make students feel wanted and let families think they’re getting a good deal, like a shopper who buys an expensive sweater on sale.
The awards also help campuses lure top students from even more prestigious institutions, a few dozen of which don’t offer merit aid at all. As published tuition rates climb and debt burdens grow daunting, more students and families have begun to question the value of traditional, four-year degrees—or at least, how much they’re willing to pay for such programs. Lowering the price has been one way to ease those concerns.
David Strauss, a principal at higher-ed consulting firm Art & Science Group LLC, says schools are using a strategy well known to retailers: Shoppers generally prefer to buy a $60 shirt at a 50% discount than a shirt originally priced at $30.
Offering merit aid “certainly does help us enroll academically gifted students,” said Laurie Koehler, vice provost for enrollment management and retention at George Washington, in Washington, D.C., where tuition is $55,140 for next year.
George Washington spent $138 million in institutional funds last year on scholarships and grants for those who qualify as needy under federal calculations, an increase of 4.4% from the 2014-15 school year. But non-need-based aid surged 52%, to $48.6 million, over the same period. Many students also receive grants and loans from federal and state sources.