African-American Students and the Financial Aid Cartel

Abstract

THE ELITE, TRADITIONALLY white colleges are eager to maximize their enrollments of talented African-American students. At the same time, many highly selective colleges, led by the eight colleges in the Ivy group (Brown, Columbia, Cornell, Dartmouth, Har? vard, Pennsylvania, Princeton, and Yale), tacitly collude to limit competition for desirable undergraduate students. This collusion takes the form of a common policy that permits undergraduate students to receive financial aid ? that is, to receive discounts off their full tuition charges ? only on the basis of need. This policy precludes scholarships that are explicitly awarded on the basis of merit. (In this context merit is shorthand for any nonfinancial characteristic that makes a student especially attractive to a college.) By awarding only need-based undergraduate financial aid and by also adopting a niggardly definition of need, colleges are able to enroll desirable students while not giving them more than the minimum necessary amount of financial aid. I do not deal here with social or ideological issues of why traditionally white colleges seek to maximize their enroll? ments of African-American students nor do I evaluate the