Pell Breaking Loose

Felix dissects a recent report revealing how American colleges utilize Pell grant money to skimp on the intended poorer recipients and rake in more rich applicants:

The big picture here is that colleges are spending as much money as they can on “merit” scholarships, rather than “need” scholarships. The former have two big advantages over the latter, as far as colleges are concerned. Firstly, by attracting the best students, rather than the merely impecunious, they improve the quality of the student body, at least in theory. Secondly, and more importantly, because they are smaller, they allow the university to make much more money. As [the New America report] puts it: “it’s more profitable for schools to provide four scholarships of $5,000 each to induce affluent students who will be able to pay the balance than it is to provide a single $20,000 grant to one low-income student.”