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Study Finds 'Trade-Off' Between Financing National Merit Scholars and Enrolling Pell Grant Recipients

Susan Notes: This is a summary of the research paper. A link is provided at the end of the summary.

When a college increases the number of National Merit Scholarships it finances, the proportion of Pell Grant recipients on the campus declines, according to a new working paper by three higher-education researchers.

The result, the researchers found, is a trade-off between using the scholarships to attract students with high standardized-test scores and attracting students from middle- and low-income families with the grants. That "displacement effect" occurs primarily at colleges with growing enrollments, and is most pronounced at institutions enrolling the most National Merit Scholars, the paper says.

The paper was written by Ronald G. Ehrenberg, director of the Cornell Higher Education Research Institute; Liang Zhang, an assistant professor of higher education at the University of Minnesota-Twin Cities; and Jared M. Levin, a research assistant at the Cornell institute.

Their findings coincide with the University of California's decision this week to stop financing National Merit Scholarships because of concerns about the use of the Preliminary SAT -- or PSAT -- as a qualifying examination for the program (The Chronicle, July 14).

"If selective institutions, especially public ones, are committed to serving students from all socioeconomic backgrounds," the authors wrote, "these institutions must track the share of their students that receive Pell Grants and focus on socioeconomic diversity as well as on student selectivity as goals."

The researchers' findings pertain only to the institutional financing of the scholarships. They determined that students whose National Merit Scholarships were financed by either the National Merit Scholarship Corporation or another outside source did not displace lower-income students at a particular college.

The paper, "Crafting a Class: The Trade-Off Between Merit Scholarships and Enrolling Lower-Income Students," is scheduled to appear in a forthcoming issue of the Review of Higher Education and is available on the Cornell institute's Web site .

— Eric Hoover
Chronicle of Higher Education



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