Toward More Equitable Distribution of College Student Aid Funds: Problems in Assessing Student Financial Need
ACT RESEARCH REPORTTOWARD MORE EQUITABLE DISTRIBUTION OF COLLEGE STUDENT AID FUNDS: PROBLEMS IN ASSESSING STUDENT FINANCIAL NEEDNo. 4343May 1071THE AMERICAN COLLEGE TESTING PROGRAMP. O. BOX 168, IOWA CITY, IOWA 62240 ABSTRACTThis paper presents a broad overview of the assessment of student financial need. After tracing the development of the concept of financial need as it relates to student aid and the various procedures that have been used to determine .financial need, the issues related to need assessment are examined. First, research on the problems involved in collection of financial information is reviewed in an attempt to identify the most reliable items and procedures. Although the use of financial information that is related to the federal income tax system appears to produce the most reliable results, the lead time between application for financial aid and matriculation to college and the collection of asset information represent unresolved problems. Second, the procedures used to analyze individual financial need are reviewed, pointing out the steps involved in the development of a need analysis model, the data used to construct the standards against which the financial situations of individual families are evaluated, and the differences in the analysis of income and assets that exist. The final section discusses current problems in need assessment. They include the relationship of need assessment to available aggregate financial aid, the appropriate living standard to be incorporated into the need analysis model, the different effects of “ absolute" and "relative" financial need, and the effects of changing economic conditions on the ability of parents to pay for higher education and the consequent financial need of students. TOWARD MORE EQUITABLE DISTRIBUTION OF COLLEGE STUDENT AID FUNDS: PROBLEMS IN ASSESSING STUDENT FINANCIAL NEEDM. D. OrwigMuch is written recently of the financial plight of higher education. Rising cost per student, increasing enrollment, and a leveling of federal, state, and private support have all combined to assert considerable financial pressure on colleges and universities throughout the country. One result of these pressures has been rapidly increasing tuition at both public and private institutions.Many proposals have been advanced to help parents and students and the colleges themselves pay for the rising cost of higher education (Orwig, 1971). Although the proposals have ranged from free public education for all (Wattenbarger, 1971; Chambers, 1968) to full-cost tuition for those who can afford it (Friedman, 1962, 1968; Hansen & Weisbrod, 1971; Roose, 1970; Clurman, 1969), perhaps the most common element of most proposals for aid to higher education is that at least a portion of the aid be granted to students on the basis of their financial need. The proposals of the Carnegie Commission (1968, 1970), the "Rivlin Report" (U.S. Department of Health, Education, and Welfare, 1968), Bowen (1968, 1969), the 1970and 1971 proposals of the Nixon Administration, Hansen & Weisbrod (1971), and others (Kerr, 1968, 1969; Rivlin & Weiss, 1969; Bolton, 1968) all have as at least one aspect of their proposals for financing higher education a financial-need-based student aid program. Yet seldom do any of these proposals deal with the question of how student financial need should be evaluated, what should be considered, and what, in fact, is the basis for financial need.It is the purpose of this paper, therefore, to examine the concept of student financial need. After reviewing the history and development of need-based financial aid and the evaluation of student financial need, the concept of need analysis will be examined in terms of the variables considered and the models used to assess financial need. Finally, the paper will explore present problems in need analysis pointing to the implications of alternative conceptions to students and parents, institutions of higher education, and funding agencies. An OverviewThe origin of student financial aid was traced by Rudolph to the earliest forms of American higher education (1965):From the beginning the American college was cloaked with public purpose. . . . The college was expected to give more than it received— not more than it received from the society it served, but more than it received from the particular young men who were being prepared to do society's work [p. 177].Hence, by charging students less, in the form of tuition and fees, than it cost
