Comparing College Financial Aid Policies Around the Globe

A study by the Educational Policy Institute, a nonprofit group with offices in Australia, Canada, and the United States, finds that nonrepayable scholarship grants are the most effective means of increasing the number of low-income students who enroll in higher education. The study of financial aid policies in a number of developed countries found that need-based scholarship grants are the best bet to increase the economic diversity of the college student population.

Alex Usher, the author of the report entitled Grants for Students: What They Do, Why They Work, writes that “grants are required to entice low-income students into post-secondary education because a variety of factors, both real and perceived, lead them to underestimate the true long-term financial benefits of higher education.”

The report concludes that financial aid policies in Australia, New Zealand, and Great Britain take the right approach. But Usher is highly critical of American financial aid policies which spread the financial aid dollar across the entire socioeconomic spectrum. This is wasteful, according to Usher, because middle- and high-income students in these countries would pursue higher education even without government financial aid by simply taking on debt.