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Who Benefits from Financial Aid?
An Interview with Assistant Professor Bridget Terry Long

Harvard Graduate School of Education
October 1, 2002

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Audio Selections about the Research
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Last spring, Assistant Professor Bridget Terry Long was a featured speaker at HGSE Alumni Weekend about her research in financial aid in U.S. higher education. Some excerpts from that lecture are included here:

An audio resource Bridget Terry Long on the rate at which college tuitions are outpacing family incomes (2 minutes) listen  need help?

An audio resource Long on family incomes required by different types of college educations (1 minute) listen  need help?

An audio resource Why hasn't the Pell Grant had its intended effects? Long's response (3 minutes) listen  need help?

An audio resource Long reviews lessons learned from state merit-based financial aid programs (3 minutes) listen  need help?

An audio resource Long reviews the range of obstacles to college access for kids from low-income backgrounds (2 minutes) listen  need help?

Assistant Professor Bridget Terry Long
Assistant Professor Bridget Terry Long
(Karlyn Morissette photo)

Trained as an economist, Assistant Professor Bridget Terry Long applies the theory and methods of economics to her examination of various aspects of the market for higher education. Her research interests focus on college access and choice, the effects of financial aid policy, and the behavior of postsecondary institutions. Her current research projects include studies of how recent federal tax credits for higher education have affected college decisions, the impact of aid policies on institutional behavior, and the effectiveness of remedial education programs at colleges. She teaches in the Higher Education Program at the Harvard Graduate School of Education.

Q: In the future, do you expect college tuition to continue to become less affordable for lower-income families?

A: Low-income families depend heavily on government support in order to make college a reality. This support comes through need-based policies, such as Pell Grants and Perkins Loans. Unfortunately, there has been a national shift towards merit-based aid and support, both of which increase affordability for the middle class.

While these may be important endeavors, we are currently working with limited resources and need to be smarter about how we allocate financial aid. Low-income families have the greatest need and will benefit the most from financial aid programs. The exception to this tendency is the increase in institutional financial aid. Although the list price of colleges is high and increasing rapidly, very few students are paying full tuition. Low-income students who are academically talented may be able to tap into the significant amount of merit aid available from colleges in order to meet tuition costs.

Q: You suggest an annual family income of $100,000 as necessary to pay for a private four-year college without financial aid. What are some of the effects of this reality?

A: As I've said, most students do not pay full tuition costs—this is particularly true at private colleges. Nevertheless, the most immediate effect of tuition prices has been the increase in the amount of debt students acquire during their four years of college. Fortunately, education is an investment with a large return, and most students believe that their education is well worth the efforts of applying for and repaying loans.

Q: Do you have any proposals for increasing student and/or family awareness about financial aid opportunities?

A: Most families, particularly those with the greatest levels of need, are aware of the many resources to help them pay for college. The government has recently made efforts to increase the awareness of financial aid availability using the Internet. However, continued efforts are necessary. First, we need to increase counseling in schools. Low-income students are far less likely to receive college information from their counselors, largely because of limited resources in the schools.

Many community programs—like the COACH program run by Tom Kane and Chris Avery—try to fulfill this need for counseling by using volunteers as counselors for students. We also need to inform parents, and we need to do so while their children are younger. For many families, high school counseling takes place too late. Preparation for college involves not only savings and awareness of financial aid programs, but also the completion of the necessary courses and admissions tests (e.g., SAT or ACT) by the students.

In addition, my colleague Tom Kane [COACH executive director] and I are strong proponents of simplifying the financial aid system. Currently, families have to submit a complex application to be eligible for federal financial aid. However, the government already knows a great deal about who is poor in this country, due to the welfare system and the free lunch program. It would be more sensible for these students to be automatically eligible for college financial aid. Previously, the Social Security Student Benefit Program gave a significant grant to students with deceased or disabled parents. Students received a letter during their senior year, discussing their eligibility, and only had to reply in order to receive the aid. A similar program should be implemented for low-income students.

Q: How do you think the Georgia HOPE program (a merit-based aid program) could be improved? Do you believe it could be changed to encourage more low-income students to seek a college education at a lower cost to the state?

A: Georgia has already adjusted the program so that low-income students who receive the Pell Grant are now also eligible for the HOPE Scholarship. It would be best, however, to retarget the money so that a majority of recipients are from lower income groups. The problem with this suggestion is that since its enactment, the HOPE Scholarship has become an entitlement in the eyes of the middle class. As a result, it would be impossible for the state to impose income limits at this point in time.

Q: In your opinion, are most universities doing a respectable job of considering students from different economical and social backgrounds? How might we begin to improve the current situation?

A: For most colleges, the top priority is attracting the best students possible. High-achieving students increase institutional prestige, help to attract top faculty, and reflect well on the college by becoming successful alumni. However, the methods used to enroll these students vary among the different tiers of colleges. The best colleges have the luxury of choosing among many talented students from varying backgrounds. Diversity in all senses of the word is a priority at these schools, and they do not have to sacrifice quality in order to fulfill this mission. Many of these schools are quite wealthy and can afford to be "need-blind," accepting and supporting students regardless of their ability to pay.

Unfortunately, schools in lower tiers must "buy" talented students by using merit-based aid to attract them. This often comes at the expense of need-based aid and consideration for students from different backgrounds. Colleges trying to increase their ranking and prestige are reluctant to accept students with lower scores or who may need a great deal of support in order to succeed.

For More Information
More information about Bridget Long is available in the Faculty Profiles.

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