Need-Based or Merit-Based Financial Aid
Financial aid over the United States has been helped a lot of high school graduates and people who tries to re-build or enhance their careers. Georgia Institute of Technology (Georgia Tech) also has been offering a great amount of financial aid to new students and current students as one of top public universities in the nation. One type of financial aid is need-based financial aid. It is based on financial need and students who apply this type, for example Federal Supplement Educational Opportunity Grant, have to show their needs but not have to repay. Other type is merit-based financial aid which awards to students who have excellent academic record, accumulative GPA of 3.0 and does not require repayment as well as need-based ("Scholarships," Georgia Tech). Georgia Tech awarded over 34 million dollars during the 2003-2004 academic year as a total of both need-based and merit-based financial aid ("Common Data Set 2004-2005," Institutional Research & Planning). Need-based and merit-base financial aid distributed almost the same amount of grants although merit-base was about 2 million dollars more than the other. Today as Georgia Tech does, many top universities such as Harvard University and Yale University turn to offer more merit-based financial aid than the other. The question is which need-based or merit-based financial aid should be offered at Georgia Tech. In other words, which financial aid our society needs more today? Although the answer is truly controversial, it should be primarily need-based rather than merit-based at Georgia Tech.
First of all, because Georgia Tech is a public school which is one of governmental public goods, it should give equal opportunities to all college degree seekers who would like to go to Georgia Tech. Georgia Tech is one of the top colleges in the nation as U.S. News shows that it is ranked at 10th over the all national public universities ("Top Public National Universities," U.S.News ). Thus, students should have a good standing on their academic performance. This is a basic assumption on both types of financial aid at not only Georgia Tech but also other universities. Then, assuming there are two admitted students by Georgia Tech who have good academic performance as exactly well as the other, but one of them have financial difficulty and cannot pay tuition without financial aid, which one of these two students Georgia Tech should give financial aid to so that equity can be established? To the needed student is obviously fair in a sense of governmental public goods. In fact, the minorities, for example, blacks on the average earn gabout one tenth of the salary of whitesh (Grossman 2000, 30). Besides 31 percent of the undergraduate enrollment at Georgia Tech in fall, 2004 was minority ("Enrollment," Institutional Research & Planning). These two facts mean that Georgia Tech has a lot of students who need financial aid. Thus it apparently should offer needed-based to maintain equality.
Is tuition at Georgia Tech expensive? It is actually not. The tuition for first year residents at University of Michigan is estimated $8,202 per year and $26,028 for non-residents in the 2005-2006 academic year ("Estimated Student Budgets," University of Michigan, Office of Financial Aid) On the other hand, the one at Georgia Tech is $4,446 per year for residents and $18,390 for non-residents ("Costs," Georgia Tech). As these number shows, tuition at Georgia Tech is not expensive compared to other top public universities. Here is simple calculation. If a student earns $10 per hour, he or she may be able to pay tuition with 444.6 hours work in a year. He or she may be able to work after school, study after working and sleep only for a couple of hours all years. However, on the contrast, the non-needed students without even financial aid can let their parents pay the tuition, study and probably have a party for the rest of day. This case is not applied to all students, but, yes, to some students. Is it fair that Georgia Tech gives financial aid to the non-needed students in this case? This is not clearly fair. Georgia Tech as a public school should show equality.
In addition to equality, the need-based financial aid will help Georgia Tech itself to achieve higher quality. High school students with financial difficulties study harder and harder to try to get need-based financial aid at Georgia Tech since the financial aid is the only way that they go to Georgia Tech. They know how financial aid is valuable and studying hard leads to that. Then they become more intelligent. After they start to study at Georgia Tech, and they contribute to Georgia Tech in many way. For example, atmosphere in classes will be more sophisticated. Whole class will be infected by their good attitude. Researches they are involved will make great progress since they will devoted to those researches.
In addition to the quality of enrolling or applying students to Georgia Tech, the number of applicants will be shifted to larger if Georgia Tech offers more need-based financial aid because high school students pays attention to it even though those financial aid may not be awarded to them because they at least have more opportunities to get financial aid (Gregory 1978, 548-549). Even though Georgia Tech has enough students to just operate the school in the matter of budget earned from their tuition, in fact, it does not seem to be enough because tuition at Georgia Tech becomes more and more expensive year by year. Of course, the Act of Budget Cut by government to education was obviously the trigger. Tuition for resident Undergraduates in the term of 2004-2005 is $3,368 and one in the term of 2005-2006 is $4,483 ("Costs," Georgia Tech). If the tuition goes up at same rate of these terms, it would be $15,633 ten years later. If it happens, it would be more difficult for students who need financial aid to enter Georgia Tech. To resolve this tendency, Georgia Tech should have more students to get more budgets, and the need-based financial aid will contribute to gain the larger number of the enrollment.
In conclusion, it is truly debatable which need-based or merit-based financial aid at Georgia Tech is primarily proper since the amount of merit-based one will decrease when more need-based one is offered, whereas the amount of need-based one will decrease when more merit-based one is offered. To get their own benefits and advantages, students without financial difficulty will say it should be merit-based, and students with financial difficulty will say, on the other hand, it should be need-based. It must be based on which gives proper equality to average people since Georgia Tech is public school, one of the governmental public goods. Besides, need-based financial aid is more efficient than merit-based one. Some of minorities who are one-third of Georgia Tech students and some who are not receive benefit of need-based financial aid. It will help more Georgia Tech to maintain or even make the quality of students and Georgia Tech itself higher than the other. Moreover, need-based financial aid will gain more enrollments, and it will resolve the budget problem on Georgia Tech. Financial aid is to exist for both students and Georgia Tech itself. Keep this philosophy in mind, financial aid at Georgia Tech should mainly need-based.
Georgia Institute of Technology. "Scholarships." http://www.finaid.gatech.edu/scholarships/ [accessed 23 Jan 2005].
Georgia Institute of Technology. "Costs." http://www.finaid.gatech.edu/costs/ [accessed 23 Jan 2005].
Gregory A. Jackson. 1978. "Financial Aid and Student Enrollment," The Journal of Higher Education, Vol.49, No.6 :548-574.
Grossman. 2000. "Merit-Based Financial Aid Is Eroding the Opportunities of College-Bound Blacks," The Journal of Blacks in Higher Education, No.28 : 29-30.
Institutional Research & Planning, Georgia Institute of Technology."Common Data Set 2004"-2005.h@http://www.irp.gatech.edu/Common_Data_Set_2004/Comm_Data_Set_H.html [accessed 23 Jan 2005].
Institutional Research & Planning, Georgia Institute of Technology. "Enrollmen in Fall 2004." http://www.irp.gatech.edu/apps/Enrollment/ethnicity.cfm?TERM=200408&time_status=Total [accessed 23 Jan 2005].
Office of Financial Aid, University of Michigan. "Estimated Student Budgets." http://www.finaid.umich.edu/financial_aid_basics/cost.asp [accessed 24 Jan 2005].
U.S. News. "Top Public National Universities." http://www.usnews.com/usnews/edu/college/rankings/brief/natudoc/natudoc_pub_brief.php [accessed Jan 24 2005].
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