Bad News for Blacks: Need-Based Grants Are Becoming a Smaller Slice of State Financial Aid Programs

Increasingly, financial aid for college students is being allocated on the basis of merit rather than need. Blacks, who are three times as likely to be poor as whites, disproportionately benefit when need-based aid is directed toward youngsters in low-income families. But blacks, who on average have significantly lower grade point averages and scores on standardized tests than whites, receive almost insignificant portions of merit-based aid.

A new report from the National Association of State Student Grant and Aid Programs finds that 60 percent of all financial aid provided by state governments and 73 percent of all financial aid grants are based on need. About 20 percent of all need-based grants also have a merit component where only high-performing, low-income students are eligible for the grants.

In 2006 Rhode Island and Wyoming were the only states offering varying levels of need-based aid with no awards based on merit. Six years ago there were 14 states that offered only need-based aid. In 2006 there were nine additional states where 90 percent or more of all financial aid was based on need. These states include New York, California, Illinois, and Pennsylvania, all states with large black populations.

In 2006, 22 states — up from 12 in 2004 — offered more merit-based aid than need-based aid to undergraduate students. This is serious because many of these states are in the South where there are large numbers of low-income black students who need financial assistance in order to help them bear the costs of a college education.