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Analysis: Meltdown Could Force College Aid Shift

by JUSTIN POPE, Associated Press , February 20, 2009

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Johnny is a middle-class student who worked hard to get good grades and a high SAT score. Jane’s record isn’t as good, but her family is low-income, and without help she might not be able to go to college at all.

Who should be first in line for help from the government to pay for college?

It’s a debate that hits hot-button questions about fairness and opportunity, and lately, many experts think the middle class has been winning.

But the economic meltdown could be shifting the playing field, as the government and colleges themselves are forced to focus on helping the neediest students and try to head off a wave of dropouts.

Some experts think that could prove one of the few beneficial outcomes of the downturn.

“For a long time, the discussion was about the middle-income squeeze: wealthy people could pay for (college), poor people were getting grants, people in the middle were having a hard time,” said Vanderbilt University education professor William Doyle. While ideally college would be cheaper for everyone, he said, the research is clear that “the most efficient way to spend the money is to focus on the margins, people who wouldn’t otherwise go.”

Over the last decade, nearly every state has started or expanded politically popular “merit aid” programs that reward students with high SAT scores or grade point averages, even those whose families could afford college costs.

Colleges have done the same with their own money, dangling financial aid to attract students who will improve the college’s ranking and reputation. But sometimes that means well-off students get both a free ride and a new ride (when their parents reward a scholarship by using the college fund to buy them a car).

The federal stimulus package President Barack Obama signed into law Tuesday, however, was notably focused on helping the poorest families through college, with the largest increase ever to the Pell Grant program, which mostly supports students from families earning under $30,000 a year.

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