Moving Away From Merit Aid

When Ann Cudd joined the University of Pittsburgh as provost last September, she asked her team to look at how much unmet need the university's students have.

“The answer to that question wasn’t pretty,” Cudd said.

Pennsylvania has the second-lowest level of per-capita state support for higher education, according to a 2018 report from the State Higher Education Executive Officers Association. And its public four-year colleges have the third-highest in-state tuition and fees in the nation, according to a 2018 report from the College Board.

To address that problem, the university created the Pitt Success Pell Match Program, which began this fall. The program takes a data-driven, targeted approach to disbursing grant aid. It provides a dollar-for-dollar match for all Pell Grants.

Cudd’s office also analyzed data to find the tipping point for unmet need that caused students to leave college ($20,000 for the main campus and $15,000 for Pitt's four regional campuses). The university is providing funds to “bring students back from that cliff” and to a manageable amount of unmet need. Only first-year students are receiving this grant this year, and one class will be added each year until all classes are eligible.

“We really wanted to try to do something innovative and targeted, because we knew we couldn’t get to that wonderful zero point” for unmet need, Cudd said. Eliminating all unmet need would cost around $187 million annually, which felt like an “unreachable goal for us at this point,” she said.

The Pitt program will cost $25.4 million in its first year and reach 5,007 students at the campus, which enrolls about 24,500 undergraduates. Only full-time students are eligible for the grants, but there is no age cutoff. Both the Pell match and unmet-need grants are automatically disbursed by the financial aid office.

The university is paying for the new aid through cost-savings initiatives and reallocation of merit-based aid as need-based grants. It also made across-the-board budget cuts of less than 1 percent.

“My research background is inequality in higher education,” Cudd said. “I’ve been very interested in this question of, why are we doing merit-based aid? So I came to this role with that question in mind.”

Marcia Sturdivant, president and CEO of NEED in Pittsburgh, said the program is creative, strategic and mindful. NEED is a nonprofit college-access program that helps underserved high school students prepare and pay for college.

“I think it’s a great idea and a very generous concept to include students who may not otherwise be able to afford tuition at the University of Pittsburgh,” Sturdivant said. “I think it also speaks to the integrity of the university.”

Tiffany Jones, director of higher education policy at the Education Trust, said it’s “really impressive when an institution steps up to the plate” in a state with high costs for higher education and low state support.

The Pitt Success program gets a few things right over programs at other institutions, Jones said. First, it helps students pay for bachelor’s degrees, not just two-year degrees, increasing their earning potential. It also provides funding beyond tuition, so a student can use the Pell Grant match for expenses like housing and books.

Merit Aid and Lower-Income Students

However, Jones said Pitt does not enroll many Pell recipients. While nearly half of K-12 students in the state receive free or reduced lunch, indicating a high population of low-income people, only 16 percent of the university’s undergraduate population were Pell Grant recipients in the 2017-18 academic year, according to the National Center for Education Statistics.

“Where are those other low-income students in the state going to college?” Jones said. “Do they not have access to the University of Pittsburgh?”

Cudd said the university is trying to address that issue, and the grant program seems to be helping. This academic year, the number of Pell-eligible students on all campuses increased by 12.4 percent compared to last year.

“Historically, the University of Pittsburgh for the last 15 or 20 years has really been trying very hard to provide this very top-notch, first-class education, and has had to improve the quality of students in terms of their drive and motivation, and we’ve done a great job of raising various metrics,” Cudd said.

But, by using merit-based aid to do that, she said the university started to lose lower-income students.

“We’re looking to add motivated, lower-income students who couldn’t come” due to the cost, she said. The university analyzed the quality of the class after reallocating merit-based aid and found that the students were just as high achieving as before.

“They just now can afford to choose Pitt,” Cudd said.

Sturdivant believes the program will help increase diversity at the university.

“Students shouldn’t have to make decisions on whether to continue education because of financial situations, but that’s the reality,” she said.

Cudd said the university has the program budgeted out years in advance. By year nine, it will be part of the ongoing budget and will regularly renew. She expects to retain more students with the aid, which will ultimately help the university and raise enrollment at the regional campuses. Cudd is also investing her discretionary strategic funding as provost toward the program for several years, she said.

The university plans to assess the program by looking at how students use the extra funds and how it affects diversity. It is also working to diversify the faculty's ranks, Cudd said.

So far, Cudd said she hasn’t come up against any backlash to the program or shifting of funds.

“Higher education is coming to a real crisis point in terms of not being able to serve the goal of social mobility,” she said. “I’ve been really heartened by the degree to which this has had pretty much universal acceptance and enthusiasm.”