EDUCATION As tuition grows, so does aid

Fourteen states offer grants to middle-class students.
WASHINGTON -- Parents, take heart: College tuitions are soaring, but fewer families are paying the sticker price.
A multibillion-dollar surge in financial aid based on merit -- rather than only on financial need -- is the big reason. Fourteen states now offer residents merit-based grants to help middle-class families meet college costs. Hundreds of colleges and universities woo top scholars and gifted musicians with tuition breaks regardless of family income.
"It defies the principles of lots of vice presidents for finance, but it makes sense to the parents," said Kevin Coveney, the admission dean at Washington College in Chestertown, Md., where any high school National Honor Society member is guaranteed a $10,000 tuition break.
Abundance of aid?
The effect of all the new aid is to drive down the number of students who are footing full college costs themselves. It's 37 percent now, down from 45 percent in 2000, according to the National Association of Student Financial Aid Administrators. At private four-year colleges, the number drops to just 17 percent. The aid's abundance makes tuition increases for many students as theoretical as list price increases for new cars.
Georgia's HOPE scholars -- high school grads with B averages in college prep courses -- get free tuition at state schools plus $300. Florida's Bright Futures scholars get three-quarters tuition breaks plus $300 at state schools if they earn B averages and SAT scores of 970 or better. B-plus students with 1270 SAT scores get free tuition. Students at in-state private colleges in Georgia and Florida get equivalent breaks.
Michigan asks only that its students pass a state exam to score a $2,500 grant for a state school or $1,000 for an out-of-state one.
Popular initiatives
The programs are huge. Georgia has spent $2.3 billion on 800,000 students since its pioneering program began in 1993. Florida's merit grants now help 120,000 college kids; Michigan's, 49,000.
So popular are the state initiatives, many funded with lottery revenues or tobacco-settlement proceeds, that legislators find they're difficult to cut, especially given that tuition increases averaged 10.5 percent at public universities last year. That's about four times the overall inflation rate.
The biggest fans are "mainly middle-class families," according to Jamie Merisotis, the president of the Institute for Higher Education Policy in Washington, which promotes access to college. "It's due both to rising tuitions and the belief that if low-income people are getting a benefit, there should be something for other groups based on merit."
To be sure, most of the more than $75 billion in annual aid for higher education remains need-based. But the growth is in merit aid. States now spend a quarter of their scholarship money on merit awards, up from 10 percent a decade ago, according to financial aid organizations. Merit aid's share of private college scholarships is 36 percent, compared with 27 percent in the early '90s.
"We've found hundreds of new awards in the past year," said Baird Johnson, the vice president for production and marketing at FastWeb, an Internet database scoured by seekers of merit-based aid. FastWeb's directory grew 20 percent this year, according to Johnson.
Lots of legwork
For high school seniors, the hunt for merit-based help means a new round of applications in the spring after they've won college admission. "It takes as much legwork as applying to college, with all the applications and essays and recommendations," said Barbara Weintraub, a college counselor at James Hubert Blake High School in Washington's Maryland suburbs. Hunting for merit aid can be especially frustrating, she added, because "while there's a lot out there, it tends to be in $500 and $1,000 pieces that don't go very far."
Suzanne Adjogah, 17, an academically outstanding senior at Montgomery Blair High School, is undeterred. She's already scored a $30,000 scholarship from the University of Pittsburgh. Now she's trying to piece together a combination of need-based aid, merit grants and loans that would make New York University in New York City, her first choice, equally affordable.
She doubts she'll succeed, however, and when asked her parents' preferences, Adjogah said: "They want me to go where I'd be happy. They also want me to go to where it's free."