Colleges give largest grants to wealthiest students

College students in a classroom.

More than half of college students now rely on federal grants and loans, according to a new report from the U.S. Department of Education. But even as more federal grants are going to low-income students, colleges are giving more aid to students who are better off.

Jim Rawlins, president of the National Association for College Admission Counseling and director of admissions at the University of Oregon, says one reason is that wealthier families tend to go to pricier colleges.

“Giving them $8,000 towards a $45,000-a-year tuition bill is still having those families pay quite a bit of money,” Rawlins says.

Students with family incomes above $100,000 received grants that were roughly 25 percent larger than those whose families earned less than $20,000, according to the report. Students from the top-earning families also received $10,200 in institutional grants on average – compared to $8,000 in grants for families below $20,000 in annual income.

Halley Potter of The Century Foundation says that while tuition costs can be a burden even for well-off students, families with higher incomes aren’t as likely to see the costs as prohibitive.

“Those aren’t the families for whom it’s really gonna make a difference whether or not the students go to college at all,” Potter says.

Affluent students often end up getting a larger share of merit-based aid, as well. Rawlins acknowledges there’s pressure to use scholarships to boost the school’s academic rankings.

“That becomes part of a balance between what a school wants to do and what it knows it has to do,” he says. “I certainly see some problems with that, but I also see some inevitability about it.”

With endowments depleted by the recession, Rawlins says it’s harder for colleges to give grants to students in need.

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