Among undergraduates who enrolled in a 4-year college or university for the first time in 199596, about 38 percent of full-time students received institutional grant aid, including about one-quarter (24 percent) in public institutions and nearly two-thirds (62 percent) in private not-for-profit institutions.
Institutional aid can be awarded on the basis of financial need, academic merit, or both need and merit. In addition, depending on the selectivity of the institution, institutional aid packages and amounts may vary. Therefore, in this analysis, students’ high school academic merit,3 their financial need,4 and the selectivity of institutions5 were taken into account when examining patterns of receipt of institutional grant aid.
Many of the differences observed in institutional grant aid awards were related to the selectivity of the institution. For example, in both public and private not-for-profit institutions, the likelihood of awarding institutional aid in very selective institutions did not vary significantly with students’ academic merit, whereas in less selective institutions, it did. In less selective institutions, as students’ high school academic merit increased, so did their likelihood of receiving institutional grant aid.
Differences by institution selectivity were also evident when examining the relationship between institutional aid awards and students’ financial need, especially in the private sector. In very selective private not-for-profit institutions, as students’ financial need rose, so did their likelihood of receiving institutional grant aid, from 21 percent of those with low financial need, to 59 percent with moderate need, to 66 percent with high need. In less selective institutions, on the other hand, while there was an association between institutional aid awards and financial need, fully one-half (51 percent) of students with low financial need received institutional grant aid, as did 71 percent of both those with moderate and high need.
In both less selective and very selective public institutions, students’ likelihood of receiving institutional grant aid was clearly associated with their financial need. Students with no financial need were less likely to receive institutional grant aid than their counterparts with high need. However, students with no financial need were more likely to receive institutional grant aid in less selective institutions than in very selective institutions, whereas those with high need were more likely to receive aid in very selective institutions.
When looking at students’ financial need in relation to their high school academic merit, positive associations between students’ financial need and the likelihood of receiving institutional aid awards remained for those who had achieved no higher than moderate levels of high school academic merit. This was observed for all institution types, including less selective private not-for-profit institutions: at such institutions, among those who had achieved moderate levels of academic merit, 69 percent with high need received institutional grant aid, compared with 47 percent with low need. However, as discussed below, for students who had achieved high levels of academic merit, whether or not they received institutional grant aid in less selective institutions did not vary significantly with their financial need.