States Weigh Value Of Merit-Based Aid

But critics in other corners of the nation say merit-based aid is not an effective use of state funds.

Keith Sanders, director of the Illinois Board of Higher Education, raised the idea of expanding the state's merit-based financial aid program in a Feb. 5 meeting with state university presidents from across the nation.

But Don Severen, the Illinois Board of Higher Education's communications director, said an actual proposal has not yet been made.

Severen said Illinois already has a merit-based aid program that awards $1,000 to Illinois high school students who graduate in the top 5 percent of their classes and attend an Illinois state university. But he said the board has not considered new plans and that any plans are simply ideas being tossed around.

Since the Georgia HOPE scholarship's inception in 1993, 10 other states, including Florida and South Carolina, have implemented similar merit-based programs.

North Carolina does not have such a program. And Shirley Ort, UNC director of scholarships and student aid, said she would be surprised if state officials would ever support one.

Ort said the nationwide increase in merit-based financial aid programs is the result of pressure put on states to retain their "best and brightest" students. She said much of the pressure stems from institutional rankings in publications such as the U.S. News & World Report.

Ort said the programs, while politically popular, are inefficient because most states do not take into account the financial burdens on the states that these programs can create.

Ort also said states need to focus more on helping students with financial need.

"The state's first obligation is to provide need-based financial aid for needy students who otherwise couldn't afford to pay for college," she said.

The issue of merit-based financial aid versus need-based financial aid has recently crept up on the Florida Bright Futures scholarship.

Florida state law requires the state to provide financial aid based primarily on need. But of the $425 million Florida will spend on financial aid this year, only $114 million is need-based.

Florida Sen. Don Sullivan, R-Largo, said the Florida legislature is considering several changes to the program, such as raising eligibility requirements. "I don't think we have any evidence that (the merit-based scholarship) has encouraged students to work at a higher level."

Sullivan said the state has gotten to the point where it needs to re-evaluate the scholarship. "(Florida) is spending $240 million (on merit-based scholarships) and nothing much has changed."

The State & National Editor can be reached at stntdesk@unc.edu.