A STUDY OF FRESHMEN FINANCIAL
ND AWARDS WITH RESPECT TO
STUDENT NEED

Thesis for the Degree of Ph. D.
MtCHlGAN STATE UNIVERSITY
MARVIN G. RIST
1970

 
 
 
 

   
 

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LIBRARY
Midfipn State

 

 

This is to certify that the

thesis entitled ,
A STUDY OF FRESHMEN FINANCIAL AID AWARDS

WITH RESPECT TO STUDENT ’NEED

presented by

MARVIN G. RIST

has been accepted towards fulfillment
of the requirements for

ADMINISTRATION AND

PH.D.
HIEHER EDUCATION

degree in

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Date MAY 22 ,

 

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IND.

ABSTRACT

A STUDY OF FRESHMEN FINANCIAL AID AWARDS
WITH RESPECT TO STUDENT NEED

BY

Marvin G. Rist

The primary purpose of this study was to analyze
the financial aid awards made by one university to an
entering freshmen class to determine if all aid recipients
were being treated in an equitable manner. Two particular
aspects of the awards were studied: first, the amount of
aid granted in relation to the student's need was analyzed
to determine if the needs of the students in various groups
were fulfilled in the same manner; second, the ratio of
gift aid to self-help in the awards was reviewed in order
to determine if the burden of self-help was equitably
distributed.

Investigations peripheral to the purpose of this
study were conducted in order to determine pertinent in-
formation relative to two exploratory questions. The first
question sought to determine the effect that a proposed
financial aid policy would have had on the enrollment plans

of the students involved in this study. The hypothetical

Marvin G. Rist

policy would have required each student to assume a
specific amount of self-help prior to being eligible for
gift aid. The second question led to an investigation of
the possibility of improving the precision of predicting
the first semester grade point average by using the stu-
dent's work status as one of the variables in a regression
equation.

The study was initiated by identifying all first
semester freshmen students at the University of South
Dakota who were awarded financial assistance from un-
restricted funds. The p0pulation, which involved 170 stu-
dents, was ordered according to need and then divided into
five groups with Group I being identified as the group with
the least need and Group V as the group with the greatest
need. Means for seven different types of data were com-
puted for each of the five groups and the related means
were tested for equality. Significant differences existed
among the groups with respect to the following:

1. Amount of award with relation to need

2. Proportion of award which was gift aid

3. High school grade point average

4. ACT composite score

5. High school class rank

6. Expected first semester grade point average

7. Actual first semester grade point average

Marvin G. Rist

The investigations related to the two exploratory
questions produced the following information:

1. The addition of the student's work status as

a variable to the regression equation which
included the high school grade point average,
high school class rank, and ACT composite
score did not significantly increase the pre—
cision of the prediction of the first semester
grade point average.

2. Approximately 6 per cent of the students, who
would have received a less desirable aid
package, would not have enrolled.

The analysis of the data clearly indicated that a
bias did exist in the award system of the institution in-
volved in this study. The bias was such that the group
with the least need received the most favorable financial
aid awards with respect to the fulfillment of their need
and the prOportion of gift aid which was in the award.
The source of the bias was the strong relationship which
existed between the student's social economic class, and
his success in school and on standardized tests.

Further analysis of the data revealed that the
institution's participation in the Economic Opportunity
Grants Program reflected itself in the prOportion of gift
aid in awards rather than in the relation of the amount
of the award to the student's need. The student whose

parents' income was such that he did not quality for an

Marvin G. Rist

Economic Opportunity Grant and whose academic profile was
such that he did not receive consideration for a scholar-

ship award was apt to receive an award comprised mostly

of self-help.

A STUDY OF FRESHMEN FINANCIAL AID AWARDS

WITH RESPECT TO STUDENT NEED

BY

./‘
[(

Marvin G? Rist

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

DOCTOR OF PHILOSOPHY
Department of Administration and Higher Education

1970

ACKNOWLEDGMENTS

To Dr. Walter F. Johnson, chairman of my guidance
committee, for his advice, counsel, and many considerations
during my doctoral studies;

To Dr. Norman T. Bell, Dr. Ernest Melby, and Dr.
Walter W. Scott, who each in their own way had a signifi-
cant influence on my graduate study;

To Dr. Vandel C. Johnson, for his encouragement to
undertake a doctoral program;

To Mr. Doug Steokler, Mr. Fred Hart, and Mrs.
Elvina Shoep of the Student Financial Aid Office at the
University of South Dakota, for their assistance and inter-
est in this study;

To Dr. Andrew Porter, Arshad Zaman, and John Draper
for their assistance with various aspects of the research
design:

To all the faculty and staff members of Michigan
State University, who have made my graduate study a very
pleasant experience;

To my fellow graduate students, for the many re-
wards which have been realized from my association with

them:

ii

To my wife Pat, and children Mickey, Kitty, and
Joe for their many sacrifices and patient understanding

during the past two years.

iii

Chapter

I.

II.

TABLE OF CONTENTS

THE PROBLEM O O O O O O O O O O O

The Problem . . . . . . . . . .

Purpose of the Study. . . . . . .
Importance of the Problem . . . . .

Definition of Terms. . . .
Theory and Supportive Research
Hypotheses. . . . . . .
Exploratory Questions . . .
Overview . . . . . . .

REVIEW OF THE LITERATURE. . . . . . .

The Growth of Federal Programs of
Financial Aid for Undergraduates. . .
State and Local Programs of Financial
Aids . . . . . . . . . . . .
Financial Aid for Disadvantaged Students.
Research in Financial Aids . . . . .

Research on Various Types of Awards. .

Research on the Relationship of
Financial Aid to College Attendance .

The Relationship of Financial Aid to
Persistence in College . . . . .

The Administration of Student Financial
Aid 0 O I O I I I O O I O 0

Administration to Meet Institutional

Needs . . . . . . . . . .
Administration Which Has a Personnel

Point of View . . . . . . .
Current Status of Financial Aids

Administration . . . . . . .

Recent DevelOpments in Financial Aid
Administration . . . . . . . .

Summary. . . . . . . . . . . .

iv

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30
33
34
45

48
50

52
53
54
56

6O

Chapter
III 0 DESIGN OF THE STUDY 0 O O O O O O 0

Sample Selection . . .
Sources and Nature of the Data.
Testable Hypotheses . . . .
Analysis Procedures . . . .

Development of the Proposed Packaging
POliCy O O O O C O O I O I

sumary O O O O O O O O O O 0
IV. ANALYSIS OF RESULTS . . . . . . . .
Hypotheses . . . . . . . . . .

Hypothesis 1(a)
Hypothesis 1(b)
Hypothesis 1(c)
Hypothesis 2(b)
Hypothesis 2(c)
Hypothesis 2(d)
Hypothesis 2(e)

Exploratory Questions. . . . . . .

Use of Student's Work Status to Predict
First Semester Grades . . . .
Impact of Proposed Financial Aid Policy

Summary . . . . . . . . . . .
V. SUMMARY AND CONCLUSIONS. . . . . . .
Summary . . . . . . . . . . .
Findings . . . . . . . . . . .
conCluSions O O O O O O O O O 0
Analysis of Current Packaging Policy .

Impact of the Proposed Packaging Policy
Impact of Part-Time Employment . . .

Recommendations and Implications for
Further Research. . . . . . . .

BIBLIOGMPHY . O O O C C O O O O O C C

Page

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62
62
63
65
69
74
76
76
76
78
79
80
82
83
84
86
86
87
91
95
95
96
98
98
100
102
102

106

LIST OF TABLES

Table Page
3.1. PrOposed Packaging Policy . . . . . . . 71

4.1. Analysis of Variance Summary for Testing
Difference Among Means of the Groups with
Respect to Relative Aid . . . . . . . 77

4.2. Difference Between Mean Relative Aid Awards
of the Five Groups. . . . . . . . . 77

4.3. Analysis of Variance Summary for Testing
Difference Among Means of the Groups with
Respect to the Pr0portion of Award Which
Was Gift Aid. . . . . . . . . . . 78

4.4. Difference Between Mean Proportion of Gift
Aid in the Awards of the Five Groups. . . 79

4.5. Analysis of Variance Summary for Testing
Difference Among Means of Groups with
Respect to the High School Grade Point
Averages . . . . . . . . . . . . 79

4.6. Difference Between Mean High School Grade
Point Averages of the Five Groups. . . . 80

4.7. Analysis of Variance Summary for Testing
Difference Among Means of Groups with
Respect to the High School Class Rank . . 81

4.8. Difference Between Mean High School Class
Rank of the Five Groups . . . . . . . 81

4.9. Analysis of Variance Summary for Testing
Difference Among Means of Groups with
Respect to the ACT Composite Scores . . . 82

4.10. Difference Between Mean ACT Composite Scores
of the Five Groups. . . . . . . . . 83

vi

Table

4.11.

4.16.

Analysis of Variance Summary for Testing
Difference Among Means of Groups with
Respect to the Expected First Semester
Grade Point Averages . . . . . . . .

Difference Between Expected First Semester
Grade Point Averages of the Five Groups. .

Analysis of Variance Summary for Testing
Difference Among Means of Groups with
Respect to the Actual First Semester Grade
Point Averages . . . . . . . . . .

Difference Between Actual First Semester
Grade Point Averages of the Five Groups. .

Analysis of Variance Summary for Testing
Difference Between Two Multiple Correlation
Coefficients. . . . . . . . . . .

Number of Students Losing Specific Amounts of
Aid as Related to Their Need if Proposed
Financial Aid Policy had Been in Effect
for 1969-1970 Academic Year. . . . . .

Selected Strata for the Students Losing
Financial Assistance by Application of
Hypothetical Packaging Policy . . . . .

Number of Students Completing Requirements
for Admission at Other Colleges and Uni-
versities in Addition to the University
of South Dakota. . . . . . . . . .

Comparison of Awards in Respect to the
Amount of Educational Expenses Which the
Student was Expected to Assume. . . . .

A Summary of Mean Values for Various
Classes of Data for the Five Groups . . .

vii

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84

85

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87

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89

92

93

99

CHAPTER I

THE PROBLEM

Explosive growth has been a significant charac—
teristic of student financial programs in recent years.
In 1958, there were approximately $200,000,000 of financial
assistance available to undergraduate students in the
United States. As the commitment to the equality of edu-
cational opportunity by state and federal governments and
the educational community became more intense, financial
assistance for undergraduates grew substantially.l In
the academic year of 1966-1967, undergraduates received
$1,212,000,000 of assistance. It was estimated that by
1972-1973 the aid granted to students would be
33.206.000.000.2

With the commitment toward the equality of edu-
cational opportunity came the tendency to award aid to all

students with need who have the ability to do college-

level work rather than awarding it only to those students

 

 

1Financin a Colle e Education, A Guide For Counse—
lors (New York: CoIIege Entrance Examination Board, 1969),
p. 2.

2The Chronicle of Higher Education, January 15,
1968, p. 3?

l

who could do work of scholarship caliber. Subsequently,
a concomitant concern developed relative to the equity of
the distribution of financial assistance.

The concept of packaging financial aid was imple—
mented as a possible means of obtaining an equitable dis-
tribution of funds. Packaging refers to the process where-
by a student's need is met by providing him access to loans
and employment as well as gift assistance in the form of
scholarships and economic opportunity grants. Student-
incurred loans and employment, which are major resources
in the financing of a college education, are known as
student self-help. The appraisal of the student's ability,
the cost of attending the institution, the amount of aid
available, and the philOSOphy of the school seemed to in-
fluence the manner in which gift aid would be combined with
self-help aid to fulfill a student's need. Consequently,
there is little consistency in the ratio of gift aid to
self-help aid for students either within or among insti-

tutions.3

The Problem

 

There are two distinct problems that confront the
financial aids officer as he considers a student's appli-
cation for financial assistance. The first problem has

been fairly well resolved for him as there seems to be

 

3Financinga College Education, p. 3.

 

little doubt any longer that "need" should determine who
will receive aid and in what amount. An orderly solution
to this problem has been achieved by several need assess-
ment techniques that have been developed in recent years.
The second problem, however, presents the real challenge
to financial aids officers as they must decide how avail-
able resources are to be used either singly or in combi-
nation to fulfill the student's need. Before a solution
can be achieved to the second problem, the financial aids
officer must make two decisions. First, he must decide
upon the order in which the various financial aid forms
will be used to fulfill the student's need. Concurrently,
he must also decide the amount of each particular form that
is to be included in each student's aid package.4

The financial aid officer's solution to the first
two problems, however, is generally complicated by the fact
that the total need of all applicants usually exceeds the
resources available. The manner in which financial aid
officers attempt to solve this problem ranges along a con-
tinuum. Some elect to fulfill the total need to the appli-
cants in the order which they applied for aid until all
resources are expended. On the other end of the continuum

are those financial aid officers who feel that each

 

4Rexford G. Moon, Jr., "Student Aid in a Decade of
Decision," College Student Personnel Work in the Years
Ahead, ed. by Gordon J. Klopf (Washington: AmeriCan
CoIIege Personnel Association, 1966), pp. 62-63.

 

student's award should be reduced so that the shortage of
funds is shared equally by all aid applicants. Somewhere
between these two points are those aid officers who feel
that they can best provide fair and equitable treatment by
considering each application on its own merits without

restrictive guidelines.

Purpose of the Study

The primary purpose of this study is to analyze the
financial aid awards made by one university to an entering
freshmen class to determine if a bias existed in the manner
that financial aid was awarded to various groups of stu-
dents who were classified according to need. Two particular
aspects of the awards will be studied: first, the amount of
aid granted in relation to the student's need will be ana-
lyzed to determine if the needs of the student in the vari-
ous groups were fulfilled in the same manner; second, the
ratio of gift aid to self-help in the awards will be re-
viewed in order to determine if the burden for self-help
has been equitably distributed. An auxiliary purpose of
this study is to determine whether a financial aids policy
which would have required each student to assume a specific
amount of self-help prior to being eligible for gift aid
would have caused a significant number of the students in-
volved in this study to either enroll at another school or

not to attend an institution of higher education.

Importance of the Problem

 

The American democracy has been firmly established
on the principle that the fortune of the individual and
the society rise and fall together. Consequently, the
argument for sending more boys and girls to college is
based on the presumed values to be gained by society and
by the individual. An increased potential income and per-
sonal self-fulfillment are the apparent values to the indi—
vidual. The social values of sending more able boys and
girls to college are more difficult to assess and some
may even defy measurement. The gain to society, however,
is generally described in economic gain such as gross
national product, political gain such as an informed citi-
zenry, and social gain such as stability through mobility.S

A major source of wasted talent is the substantial
number of young men and women who do not go to college or
leave college prior to graduation. Family background, the
culture of the community, sex, geography, parental occu-
pation, parental education, money and family income are
some of the factors related to a student's desire either
to go to or stay in college. The relative degree of in-
fluence that each factor has on college attendance is not

known. The money factor, however, is the only element

 

5Robert J. Havighurst, "The Social and Political
Arguments for Extending the Reach of Education," Student
Financial Aid and National Purpose (New York: CoIIege
Entrance Examination Board, 1962?) pp. 28-34.

 

which lends itself to manipulation and continues to be one
of the most discussed yet unsettled problems of the day.6
The manner in which this factor is manipulated will not
only determine who is awarded aid but also the amount and
in what form.

If consistent methods and procedures are not
developed for the manner in which a student's need is met,
then the orderliness which the need assessment techniques
were to provide will be lost in a welter of complex aid
awards.7 Evidence for this fact was provided by a study
made of the Oregon State Scholarship Program by R. A. Huff.
He found that inconsistencies and inequities existed be-
cause no standardized procedure or policy had been used to
make awards. He concluded, consequently, that student aid
programs should operate on the basis of a well defined
philOSOphy, stated objectives, and written policies. In
addition, an ongoing program of research should be main-
tained in order to determine if the objectives are being

fulfilled.8

 

6Elmer D. West, ed., Background for a National
Scholarship Policy (Washington, D.C.: American Council on
Education, 19567, p. 1.

 

 

7Moon, "Student Aid in a Decade of Decision:"

p. 63.

8Robert Allen Huff, "An Analysis of Variable
Factors Related to Selection of Oregon State Scholarship
Recipients and Application of Certain Factor Relationships
for Predicting Recipient Selection," Dissertation Ab-
stracts International, XXX, No. 4, 1362A-1363A.

 

Definition of Terms

Academic Profile: This is a graphic representation

 

of the student's academic potential as determined by a
series of standardized test scores and/or previous academic

achievements.

Employment: In respect to student financial aid,

 

this term will be used to refer to only those positions‘
which provide preferential consideration to the individual

because of his status as a student.

Grants: Awards made to students under the pro-
visions of the Economic Opportunity Grants Proqram of the

1965 Higher Education Act will be referred to as grants.

£2325: This term is used for those sums of money
which are made available to the student with the require-
ment that they be repaid in whole or in part, in some cases
with and in other cases without the payment of interest.
Only those loans which are made at a true rate of interest
lower than the prevailing rate for consumer credit are to

be considered as part of student financial aid.

Packaging: Packaging refers to the process of

 

fulfilling a student's need by awarding him one or more
forms of financial assistance such as a loan, employment,

scholarship, or Economic Opportunity Grant.

Relative Aid Award: This expression refers to the

 

difference in dollars between the student's need and his
financial aid award. The relative aid award will be nega-
tive if the student's award is less than his need and it

will be positive if it is greater than his need.

Restricted Awards: This term will be used to refer

 

to those awards which are restricted to certain students
because of: (1) their preparation and potential for
achievement in the institution's general or special aca-
demic areas, (2) their preparation and potential for per-
formance in non-academic or co-curricular areas of the
institution's program, or (3) the institution's desire to
provide a special benefit to the applicant or his parents
because of the parents' relationship to the institution,

to a particular professional group, or to a donor.9

Scholarships: This term will refer to those awards

 

of money, tuition discounts and remissions, or similar con-
siderations that require neither repayment nor some service
from the student. The student's eligibility for this

award is determined by his academic potential as predicted

by test scores and past performance.

 

9William D. Van Dusen and John J. O'Hearne, A
Design for a Model College Fipancial Aid Office (New York:
College Entrance Examination Board) 1968), pp. 6-11.

 

Theory and Supportive Research

 

The first major analysis of the characteristics of
college scholarship programs and their candidates was under-
taken during the 1954-1955 academic year. This project was
a cooperative effort by ninety-five schools which were mem-
bers of the College Board. The purpose of the research
effort was to improve financial aid procedures and to
study institutional and candidate practices. It was found
that the likelihood of a candidate receiving at least one
offer was very decidedly related to scholastic ability as
measured by the SAT-VERBAL score and to the number of
applications made. The average family income of the male
applicants was $6,800 and $7,500 for the female applicants.
Moon felt that the data available on parental background
and its relationship to the likelihood of receiving aid
did not provide obviously significant findings but that a
more detailed study of the data might reveal information
which could be reported at a later date. The mystery at
this time was the applicant who, having been denied aid
in spite of showing considerable need, still managed to
enroll in college. It was found, as might be expected,
that the lower the expense level of the institution, the
greater the tendency for a student to enroll at that

institution even though he had been denied aid.10

 

10Rexford G. Moon, Jr., "Financial Aid--From
Application to Award," College Board Review, XXXI (Winter,
1957), 15-16.

 

10

Richard G. King further reviewed the data from the
study undertaken by College Scholarship Service and con~
jectured that at no CSS college did as many as one-half
of the scholarship winners come from the neediest half of

11 J. L. Holland and L. Kent

the nation's population.
reviewed the analyses made by King, Moon, and Heist. They
concluded that a selection bias existed in the awarding of
financial aid because there was a tendency to award
scholarships to students from the higher socio-economic
groups more frequently than to students from the lower
classes, whether financial need was a criterion or not.12
In 1962, Wilbur J. Bender expressed the opinion
that student aid policies in the United States were in
need of drastic revision because of the "stacked deck" in
education which favored the child from the upper middle-
income and upper-income families. The deck was "stacked"
in favor of these children because they had enjoyed certain
advantages throughout their life in respect to cultural
Opportunities, in better schools, with better preparation

and guidance, and in family and group expectations about

going to college. He exPressed the opinion that these

 

11Richard G. King, "Financial Thresholds to Col-
lege," College Board Review, XXXII (Spring, 1957), 21.

 

12John L. Holland and Laura Kent, "The Concen—
tration of Scholarship Funds and Its Implications for
Education," College and University, XXXV, 474.

 

11

children were also receiving an additional advantage be-
cause the current financial aid practices in effect seemed
to be giving them preferential treatment.13
An analysis of the 1963 College Board's Manual of
Class Profiles was made by Elmer West and Charlene Gleazer.l4
A review of their work by John F. Morse caused him to make
the statement that the figures were astonishing if one be-
lieves that the purpose of financial aid programs is to
make it possible for students to attend college who might
not have been able to do so because of financial need.
Morse was surprised to find that only 59 per cent of the
students who came from families whose income was less than
$3,000 were granted financial assistance while 38 per cent
of the students coming from families with incomes of
$13,000 or more received aid. He also noted that sixty-
five institutions had accepted 788 students but denied them
aid in spite of the fact that they came from families whose
incomes were less than $5,000. In contrast, the same insti-
tutions offered 789 students aid even though they came from

families with incomes greater than $13,000.15

 

l3Wilbur J. Bender, "Our Student Aid Patchwork
Needs Drastic Revision," Student Financial Aid and National

Purpose (New York: College Entrance Examination Board,
1962), p. 94.

 

14Elmer D. West and Charlene Gleazer, "Who Gets
the Scholarships?" Financial Aid News, IV (1964), 4.

 

15John F. Morse, "Our Groaning Financial Aid
Structure," College Board Review, LIII (Spring, 1964), 24.

 

12

As it became more evident that a social class bias
was affecting the manner in which financial assistance was
being distributed, financial aid practices and policies
came under some severe criticism. One of the first indi-
viduals to recognize that some procedures should be estab—
lished in order to equalize the burden of self-help was
Rexford Moon. As early as 1960 he suggested that each
student should be expected to assume some responsibility
for the cost of his education. He felt that the order of
the aid awards should be loans, then employment, and
finally gift aid. In addition, he felt that it should not
be unreasonable to ask a student to borrow up to $700 per
year for his education and to earn at least $300 during
the thirty-six weeks he is in college. Moon recognized
that there might be a need to make some exceptions. He
felt, however, that a standardized system with some ex-
ceptions would be better than the present system which
seemed to be nothing but exceptions.l6

It was recognized in the 1967 edition of Manual

for Financial Aid Officers that perhaps no standardized

 

policy could be offered to guide the financial aid officer
in his effort to determine the proper prOportion of each
kind of aid to award a student. It was suggested, however,

that a good common policy would be to make self-help

 

16Rexford G. Moon, Jr., "Who Should Get What Aid
from the College?" Search for Talent (New York: College
Entrance Examination Board, 1960), p. 150.

 

l3

roughly one—third of any award package, provided the stu-
dent's need was not too great. A reasonable maximum self-
help burden should be established so that students who
have an exceptionally great need are not asked to carry too
great an obligation. A possible approach would be go be-
gin with either loans or employment up to a maximum in
relation to college costs prior to adding gift aid. This
policy would tend to provide loans and jobs to students
from the most favored economic backgrounds on the theory
that they generally are the best prepared for college and
thus well able to work and borrow. Gift aid would then
be reserved for those students with the greatest need.17
In 1968 a research study that had been undertaken
by College Scholarship Service on a large sample of appli-
cants for aid for the 1965-1966 academic year was com-
pleted. An analysis of the data was reported by G. A.
Schlekat. He found that a lower-class aid applicant was
twice as likely to receive an award as an upper-class
applicant, however, a social class bias was affecting the
kinds of aid that he would receive.18 Schlekat indicated
that the use of test scores in admissions and financial

aid decisions were the source of the bias. He concluded

 

17Manual for Financial Officers (New York: College
Entrance Examination Board, 1967), pp. l-5.

 

18George A. Schlekat, "Do Financial Aid Programs
Have a Social Conscience?" College Board Review, LXIX

 

14

his analysis with the statement that, "It's bluntly clear
that lower-class students come through our financial aid
system less comfortably than those in higher classes."19
Gross indicated that the Educational Opportunity Grants
provided by the Higher Education Act of 1965 might have
the possibility for mitigating the value system that pro-
vided scholarships for the middle-income youngster and
self-help aid for low-income youngsters. He felt that
the fact grants were made available for students of ex-
ceptional need supported the conclusion that colleges have
not been bringing their resources to bear upon the problem
of providing a sufficient number of low-income students
access to a college education. Gross speculated that in-
stitutions perhaps would not do so if a Federal program
was not available which was specifically designed to help
low-income students.20
A review of the literature did not reveal any re-
search reports relative to the effect that the Economic
Opportunity Grants Program has had on the distribution of
the burden of self-help. A release of some related data
provides doubt as to the total effectiveness of this pro-

gram toward solving the problem of the inequitable

 

191bid., p. 19.

20Stanley J. Gross, "A Critique of Practice in the
Administration of Financial Aid," College Student Per-
sonnel, ed. by Laurine E. Fitzgerald, Walter F. Johnson,
and Wilma Norris (Boston: Houghton Mifflin Company, 1970),
p. 266.

 

15

distribution of the burden of self-help. For instance,
during the 1967-1968 academic year 50 per cent of the grant
money went to students whose families had incomes of $6,000
or more. Even though more stringent guidelines were
adopted for the 1968-1969 academic year, preliminary

figures indicate that 31 per cent of the grant money still
went to students whose families had incomes of $6,000 or
more.21 These figures seem to indicate that there is a
strong possibility that the problem of the equitable distri-

bution of the burden of self-help still persists in spite

of the Economic Opportunity Grants Program.

Hypotheses

This study involves the testing of two primary
hypotheses. The first hypothesis states that a bias exists
in the procedure for awarding financial assistance to
freshmen students at the University of South Dakota. The
bias is such that the students with the least need will be
awarded financial aid packages which are significantly more
desirable with respect to the degree that their need is
fulfilled and also by the proportion of the award which is
gift-aid. The second hypothesis states that the students
with the least need will have the most promising academic
profiles with respect to high school class rank, high

school grade point average, and ACT composite score.

 

21The Chronicle of Higher Education, January 12,
1970, p. 7.

16

Exploratory Questions

 

Two investigations peripheral to the purpose of
this study will be conducted in order to determine pertinent
information relative to two exploratory questions. The
first question seeks to determine the effect that a pro-
posed financial aid policy, which will be described in
Chapter III, would have had on the enrollment plans of
the students involved in this study. The prOposed finan-
cial aid policy will require each student to assume a
specific amount of self-help prior to being considered for
a gift-aid award.

The design of this study and the nature of the
data to be collected will not permit an extensive investi-
gation of the possible relationships between the academic
performance of a student and his financial aid package.

An investigation, however, will be undertaken to determine
if the fact that a student works part-time (ten hours or
more per week) relates to his first semester grades to such
a degree that it should be considered as a variable in the

prediction of grades for freshmen students.

Overview
The problem, the purpose of the study, the impor-
tance of the study, the operational definitions, the theory
and supportive research, and the general hypotheses for the
study have been presented in Chapter I. A review of the

literature pertaining to financial aids will comprise

17

Chapter II. In Chapter III a report of the research design
is given through a presentation which defines the sample
and describes the methodology, the testable hypotheses, and
the analysis procedure. The analysis of the results will
be presented in Chapter IV. A summary of the study and the
conclusions drawn along with the implications for future

research will be discussed in Chapter V.

CHAPTER II

REVIEW OF THE LITERATURE

Frederich Rudolph makes the assertion that very few
young men or women have ever paid their way through an
American college or university. Regardless of whether a
student has attended a public or private institution, he
probably paid a very small portion of the actual cost of
his education.1 The veracity of Rudolph's statement is
revealed by the educational statistics compiled by Simon
and Grant. They found that during the 1963-1964 academic
year the tuition and fee income at public institutions
comprised only 11 per cent of the total budget and at pri-
vate institutions it comprised only 31 per cent.2

A gift of 100 pounds sent to Harvard to be used
for scholarships by Lady Anne Moulson of England initiated
the first endowment in American colleges. This gift was

the first of many philanthrOpic endeavors that have made it

 

1Frederich Rudolph, "Who Paid the Bills?" Harvard
Educational Review, XXXI (Spring, 1961), 144.

 

2Kenneth A. Simon and W. Vance Grant, Digest of
Educational Statistics (Washington, D.C.: Government
Printing Office, 1968), pp. 93-94.

 

18

19

possible to provide an education to students at less than
its actual cost. Unfortunately, many college students are
not aware of the extent to which a tradition of generosity
and service has underwritten a major portion of the cost of
attending college.

During the initial era of student aid, the American
colleges and universities found themselves in a very diffi—
cult position. They had inherited the aristocratic pur-
poses and customs of the English residential college but
were expected to serve a developing democratic society.
Financial aid during this period was stimulated by several
factors. First, the classical course of study was not
particularly popular and financial aid was used as a method
of inducing students to enroll. Financial assistance was
also used to make the institutions appear more democratic
so that they might escape their aristocratic image and
enter into a closer relationship with the peOple. One
effort to provide financial aid to students resulted in
the manual-labor movement of the 1830's. It was not very
successful and to most everyone's satisfaction the Panic
of 1837 destroyed the movement. Another effort to assist
students resulted in the Operation of dining halls for the
poor by such schools as Yale, Princeton and Brown. The
implications of second-class accommodations, however, made
the dining halls for the poor as unattractive to students
as were the "charity funds" which described the meager

endowments available for students who could not pay their

20

way. Consequently, there was a need to establish a more
desirable and more effective way of providing assistance to
students. A major means of assisting students was to design
devices which would keep tuition low. Unfortunately, most
of the low cost tuition schemes resulted in either lower
or in many times no pay for the professors.3 Blackmar
stated that the choice was a very simple one. The colleges
could either pay their professors to teach or they could
pay their students to enroll. They chose the latter be-
cause it was the only way they could achieve an enrollment
which would justify their existence.4

The movement for technological and scientific edu-
cation, which had just begun prior to the Civil War, created
many new and more popular institutions after the war. The
Morrill Act of 1862 helped to develop the land-grant col-
leges which were oriented more toward the practical and
therefore brought institutions of higher education into a
more vital relationship to the life of the peOple. As
colleges became more pOpular, the tradition of student aid
was given the burden of providing equality of access to
higher education. By 1900, various approaches to student

aid such as scholarships, loans, self-help dormitories,

 

3Frederich Rudolph, "The Origins of Student Aid
in the United States," Student Financial Aid and National
Pur ose (New York: College EntranceiEiamination Board}
96 , PP. 2-4.

 

4Frank Blackmar, The History of Federal and State
Aid to Higher Education in the United States (WaEhington,
D. C.: Government Printing Office, 1890), p. 25.

21

and student employment agencies were common aspects of

American higher education.5

The Growth of Federal Programs of
Financial AidIEOr Undergraduates

 

 

The Student Work Program initiated by the Federal
Emergency Relief Administration in 1933 was the first major
national student financial aid program. The program was
eventually taken over by the National Youth Administration.
In spite of the fact that many educators feared federal
control, the program was successful. During the period
from 1933-1943, 620,000 youths were employed by the program
and they earned $93,000,000. A system of loans was re-
jected at this time on the basis that the neediest students
would be unable to provide a satisfactory credit rating. A
program of grants was also rejected because it was felt
that if the funds generally went to the brightest students,
many times students with little or no financial need would
be assisted.

The student War Loans Program, which was in oper-
ation from 1942 through 1944, permitted students to borrow
up to $500 per year if they would accept war-related em—
ployment. About 11,000 students borrowed $3,000,000 to
study in scientific and technical fields. The significance
of the program was that it established loans as a feasible

means of student aid.

 

SRudolph, "The Origins of Student Aid in the United
States," pp. 4-8.

22

The Serviceman's Readjustment Act of 1944 provided
aid to about 8,000,000 former servicemen under a number of
laws. The program was administered by officials in the
Veterans Administration rather than educators. Living
allowances were paid directly to students but the tuition
and fee payments were made directly to the universities
and colleges that the student attended. Because veter-
ans comprised a large prOportion of the total enrollment,
public institutions were placed in a difficult situation
due to the fact that tuition and fee payments did not cover
the cost of the student's education. Federal payments to
the institutions were eliminated when the G.I. Bill was
extended to veterans of the Korean War. The new policy
provided for flat monthly payments, which were adjusted to
the number of dependents, to be made directly to the
veteran. This procedure simplified the administration of
the program and induced veterans to choose less expensive
institutions.

Current federal aid programs to college students
differ considerably from the first two major forms of
assistance. The early forms did not provide for money to
be given directly to the institution which it was to dis-
burse to students. Under the Student Work Program, the
colleges and universities decided who was eligible for
jobs. In contrast, the Veterans Administration determined
the individual's eligibility for aid under the G.I. Bill

before the student was even admitted to an institution.

23

The students were permitted to use their benefits at a
large number of vocational and prOprietary schools. The
Student Work Program, however, was restricted to the stand-
ard list of colleges and universities. Each of these two
programs was designed for a limited duration to solve a
specific problem. The legislation which established the
present programs implies that they are expected to con-
tinue indefinitely. In further contrast, the current
federal programs allow the individual college or university
to determine who shall and shall not receive aid. In
addition, most programs have excluded the pr0prietary
institutions.

Commissions appointed by Presidents Truman and
Eisenhower undertook studies to determine what the role of
the Federal Government should be in the financing of higher
education. In 1946, President Truman appointed George F.
Zook, president of the American Council of Education, to
be the chairman of the first group. The basic recommen-
dations of the Zook Report were that the states should be
given grants to be used for current operating expenses of
higher education, for capital outlay, and for a large scale
scholarship and fellowship program. Because controversies
arose among educators as to whether the public or private
institutions would benefit the most,the recommendations
made by this committee had very little impact. A poll
conducted by the National Education Association in 1949

found that only the scholarship program had general support

24

and that less than one-half of the schools favored the
guaranteed loan feature. However, the Office of Edu-
cation's continued pleas for the establishment of a fellow-
ship program led to such a prOposal in President Eisen-
hower's message to Congress in 1952.6

The second commission was formed in 1956 by Presi-
dent Eisenhower when he appointed Devereux C. Josephs to
chair a committee on Education Beyond the High School.
The Josephs Report had better acceptance and many of its
suggestions have been acted upon by Congress. This com-
mittee saw four major problem areas in education. They
saw these problems as being: (1) a lack of teachers, (2)
a need to expand educational opportunities to more people,
(3) a need for new and expanded facilities, and (4) a need
to expand funds from all sources.7

The National Defense Education Act in 1958 was a
result of the concern for the lack of teachers and was de-
signed to develop the profession. This act was passed as
an emergency measure designed to counteract serious de-
ficiencies. The act provided for student loans but no

undergraduate scholarships. The loan fund amounted to

 

6George Nash, "Student Financial Aid, College and
University," Encyclopedia of Educationggesearch, ed. by
Robert Ebel (New York: The Macmillian Company, 1969),
pp. 1339-43.

 

7Richard G. Axt, "The Josephs Report--Toward a
Federal Policy in Higher Education," The Educational
Record, XXXVIII (October, 1957). 294-95.

 

25

$80,000,000 by June of 1960 of which the Federal Government
contributed approximately 90 per cent and the balance was
contributed by the 1,300 participating institutions. For
approximately 50 per cent of the colleges, this was the
first loan program which they had available for their stu-
dents. In subsequent years, the program was significantly
extended and the name of the program was changed to the
National Defense Student Loan Program (NDSLP) in order to
reflect the broadening of the program. It subsequently
became the first long-term federal program to provide
assistance for undergraduates. Much of the incentive for
the federal legislation during this period was provided
by the technological threat of Russia's Sputnik in 1959.8
The College Work-Study Program was the result of
the war which was declared on poverty by President Johnson.
The legislation which Congress passed stipulated that the
Federal Government would pay 90 per cent of the costs
during the first years of the program and eventually 75
per cent in subsequent years.9 A student is eligible if
he is in attendance full-time and has substantial financial
need and could not otherwise attend college. Students with

less than substantial need are eligible so long as funds

 

8Nash, "Student Financial Aid, College and Uni-
versity," pp. 1342-43.

91bid., p. 1343.

26

and jobs are available. The student can work up to fifteen
hours per week during the school year and up to forty hours
a week during vacations. The institution arranges for the
campus jobs which are to be performed, the rates of pay
which must be at least equivalent to current minimum wages,
the supervision, and administrative details. Students are
also permitted to work for public or private non-profit
organizations or agencies if the work is in the public
interest. The work may not involve labor on or in a fa-
cility intended for religious instruction or worship or be
associated with a political activity.10 Most schools par-
ticipated in the program and during the 1966-1967 academic
year, students earned approximately $160,000,000.11
The failure of legislation which was intended to
provide scholarships in 1958 and 1961 was attributed to a
lack of support from the educational community. A differ-
ence of Opinion between public and private institutions
made the passage of legislation providing grants a long and
difficult process. Grants, however, became available to
students of "exceptional need" under the Educational

Opportunity Grants Program of the Higher Education Act of

 

 

 

10Financial Aid for Higher Education, published by
the COOperative Program for E ucational Opportunity under
a contract with the Educational Talent Section of the
Division of Student Financial Aid of the 0.8. Office of
Education (Washington, D.C.: Government Printing Office,
1968). PP. 27-28.

11Nash, "Student Financial Aid, College and Uni-

27

1965.12

The Federal Government provides the funds for

each grant but the participating institutions are responsi-
ble for selecting the students who are to receive them and
also the amount they are to receive. A student who is
awarded a grant must receive an equal amount from the
institution's local resources. A student is eligible if

he has exceptional need and would be unable to continue

his education beyond high school unless he has an Economic
Opportunity Grant. A student is considered to have ex-
ceptional need if the need analysis system of the insti-
tution indicates that his parents cannot contribute at
least $625 a year to his education. The student does not
need to have a superior record. The only requirements are
that he must be a full-time student and is either eligible
for admission or eligible to continue his education. A
student may receive Economic Opportunity Grants ranging
from $200 to $1,000 for each of the four years of under-
graduate education. The student can only receive the maxi-
mum if his parents can make no contribution to his edu-

13

cation and his financial need is at least $2,000. During

the 1966-1967 academic year, the Educational Opportunity
Grants Program awarded 123,000 students grants totaling

$46,000,000.14

 

12lbid.

13Financial Aid for Higher Education, p. 25.

14Nash, "Student Financial Aid, College and Uni-
versity," pp. 1342-43.

 

28

Benefits to veterans of the "Cold War" were pro-
vided for in a bill passed by Congress in 1966. Veterans
who had served since 1955 were awarded benefits up to one
and one-half months for each month of service. During the
1966-1967 academic year 330,000 veterans enrolled in
college-level training of which four-fifths were under-
graduates. The effect of the bill on institutions of
higher education was less significant because veterans
constituted a smaller proportion of the total enrollment.15

The Higher Education Act of 1965 also authorized
the Guaranteed Loan Program which is designed to aid stu-
dents from middle-income families. Under this program,
the student can obtain an educational loan directly from
a bank or other commercial lender. There are two features
in this program which are designed to enable the student
to obtain the loan. First, state, private agencies, or
the Federal Government guarantee the loan to the lender in
the event the student defaults or dies. Second, the
Federal Government assists eligible students with the
interest payments on their loans. Specific regulations
pertaining to guaranteed loans vary from one state to
another but they do follow federal guidelines. Students
are eligible for the guaranteed loans if they are in
attendance at least one-half time and if the "adjusted"

income of their family is under $15,000. A student may

 

15Ibid.. pp. 1343-44.

29

borrow as much as $1,500 per year up to a maximum of

$7,500.16

During the 1966-1967 academic year, which was
the first year of Operation for this program, 330,000 stu-
dents borrowed approximately $250,000,000. The average
amount borrowed was $750 and the modal family income of
the borrower was between $9,000 and $12,000. The program
is currently the largest federal financial aid program for

college students.17

State and Local Programs of
Financial Aids

 

 

In addition to the federal programs that have been
designed to assist students with their college expenses,
there has been an increasing number of state and local pro-
grams develOped to provide students of limited means a
chance to attend college. The tremendous number and diver-
sity of these programs makes it impossible to estimate the
exact amount of funds that are made available by them.

The proliferation of these programs in recent years, how-
ever, has caused them to be a significant factor in the
total amount of financial assistance available to students.
lbw York initiated the first program of state aid
to students in 1913. Since that time California, Connecti-

cut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas,

 

16Financial Aid for Higher Education, pp. 27-28.

17Nash, "Student Financial Aid, College and Uni-
versity," p. 1344.

30

Maryland, Massachusetts, Michigan, New Jersey, Oregon,
Pennsylvania, Rhode Island, Texas, Vermont, West Virginia,
and Wisconsin have all established competitive scholarships
for state residents with restrictions on the fields of
study. The scholarships can be used at public or private
institutions. Some states also offer tuition equalization
programs designed to assist families who elect to send
their children to private institutions.18
Financial assistance is often made available to
students by communities, states, foundations, corporations,
business firms, unions, religious organizations, clubs,
civic cultural groups, and by the institutions themselves.
The grant and loan programs of companies generally are re-
stricted to the employees or children of employees. Ingra-
ham and King in 1965 found that 93 per cent of the private
institutions waived some or all of the tuition for children
of their faculty members. Approximately 20 per cent of the

public institutions have some form of tuition waiver.19

Financial Aid for Disadvantaged Students
In recent years there have been a number of pro-
grams and projects, public and private; federal, state, and

local; individual colleges and groups of colleges; school

 

18Financingea College Education, p. 9.

19Mark H. Ingraham and Frances P. King, The Outer:
Faculty Benefits Other Than Annuities and Income (Madison:
University of Wisconsin, 1965), p. 36.

 

31

systems and independent schools: foundations and agencies
which have been initiated to specifically help disad-
vantaged students. The largest and most extensive pro-
grams were those which were the result of federal legis-
lation. The Elementary and Secondary Education Act and
Higher Education Act of 1965 are examples of extensive
federal legislation. The Office of Education used funds
provided by the Higher Education Act of 1965 to award con-
tracts to groups such as Project College Bound in Phila-
delphia so that disadvantaged high school students with
college potential could be sought out and motivated on a
person-to-person basis. Many of the programs are designed
to offer disadvantaged students extensive counseling and
tutoring long before they will be graduating from high
school since it appears that the decision to enter college
is based on more than just financial means. An example of
this approach is Project Opportunity which starts with
seventh graders who have the potential for college and
offers them counseling and special help throughout their
high school career.20
The National Scholarship Service Fund for Negro
Students (NSSFNS) was started in 1948 to increase and
broaden opportunities for Negro students in interracial
colleges. Two privately financed short-term programs have

supplemented the work Of the NSSFNS. In 1946, the National

 

20Nash, "Student Financial Aid, College and Uni-
versity," p. 1349.

32

Merit Scholarship Corporation used a $7,000,000 grant from
the Ford Foundation to establish the National Achievement
Program. This program awards at least 200 scholarships a
year to winners in a national competition project based on
academic ability. The size of the awards are related to
the student's financial need. The Independent Schools
Talent Search Program involves seventy-five schools which
identify, recruit, and refer prospects to member schools.
Many of the students are offered admission and financial
assistance. The College Assistance Program (CAP), which

is supported by a grant from the Old Dominion Foundation,
involves large numbers of college admissions and financial
aid officers. Teams of financial aid and admissions men
are formed from the members of this group. The teams visit
high schools which are either predominantly comprised of
Negro or other disadvantaged students. The visits are not
made on the behalf of any particular institution but rather
to encourage students to make plans for college. The NSSFNS
program is thoroughly explained to the students and they are
encouraged to enter the competition. The GAP (referring to
the gap between high school and college) is supported by a
grant from the Carnegie Corporation which beams the NSSFNS
college advisory service and supplementary scholarship

fund information at the students who have attended insti-

tutes or special programs on college campuses designed to

33

prepare them for college.21 One of the largest foundation
programs is the one established by the Rockefeller Found-
ation. This program provides for a concerted effort to
discover talented Negro students and encourage them to

enroll in a college or university.22

Research in Financial Aids
According to J. B. Henry there is an appalling lack

23 It has been

of research in the field of financial aids.
suggested that the lack of research may be an inter-
relation between the fact that many financial aid officers
do not have the time to do research and the feeling by some
that they do not have the competency to conduct research.
The College Board encourages financial aid officers to
undertake research regardless of its scope because of its
value to establishing policy. The research may be as
narrow as a study of one facet of one institution's program
or as broad as a study of the nation's talent loss from

the fact that many young people of college ability fail to

attend college because of limited financial resources. The

publication of the results from research efforts is

 

21Richard L. Plaut, "Plans for Assisting Negro
Students to Enter and to Remain in College," Journal of
Negro Education, XXXV (Fall, 1966), 394-95.

 

22L. Richard Meeth, "Breaking Racial Barriers,"
The Journal of Higger Education, XXXVII (May, 1966), 249.

23Joe B. Henry, "Current Issues in Student Financial
Aid," The Journal of Colle e Student Personnel Adminis-
trators, V (December, 1963 , 92.

34

encouraged because of the contribution that it provides to
the body of generalized knowledge which is beginning to be
accummulated.

It is suggested that studies be focused on the
institutions as well as on the student. Many financial
aid research projects, however, can satisfy both of these
ends. Institutional research is essential if some con-
sistent practices are to be developed. Further, this type
of research can provide some guidance and direction for the
administrative efforts of local programs. Consequently,
the results of some research can have immediate appli-

cation to the policy decisions of institutions.24

Research on Various Types
of Awards

 

 

Scholarships.--The nature of the investigations

 

pertaining to scholarships has changed as the concerns of
higher education shifted. Early research was centered on
the academic performance of those students who won scholar-
ship awards. Williamson and Feder matched scholarship
winners with students of equal ability and found that they
had a significantly higher achievement. They also found
that the attrition rate of scholarship winners followed

the same general pattern as that of the matched group.

They also found that scholarship students rated higher

 

24Manual for Financial Aid Officers (New York:
College Entrance Examination Board, 1965), pp. III-7-10.

35

both quantitatively and qualitatively in student leadership

than did non-scholarship students.25 Colver26 and Clark

and others27

found that extrinsic motivation can be pro-
duced if scholarship students are required to meet certain
academic standards in order to have their scholarships re-
newed. Even though this requirement can produce efforts
which will result in significantly higher grades, there is
an inherent danger in the practice since it may discourage
scholarship students from developing social leadership be-
cause of the demand for high grades.28
The second major research project revealed a con-
cern relative to the effective use of scholarship funds in
respect to student grades and persistence in college. An
extensive research project conducted at 147 colleges and
universities, studied data pertaining to awards made be-

tween 1950 and 1954. Robert E. Iffert, who was associated

with the project, concluded that a considerable portion of

 

25Lois B. Williamson and Daniel D. Feder, "Scholar-
ship Winners--How They Rate on Campus and in Class," Per-
sonnel and Guidance Journal, XXXI (January, 1953), 236-40.

 

26Robert M. Colver, "Scholastic Selection and
Administration--An Objective Appraisal of One Program,"
College and University, XXX (October, 1954), 20-27.

 

27Shelby C. Clark, E. Wayne Wright, and Clyde A.
Parker, "Do Renewable Scholarships Promote Higher Grades?"
Personnel and Guidance Journal, XXXV (January, 1957),

 

28Ibid. (comments by Daniel Feder).

36

the scholarship money was used by students of marginal
ability and that students who demonstrated their ability
were drOpping out of college because of financial diffi-
culties. Since it was found that 25 per cent of the
scholarship winners did not graduate in four years, Iffert
suggested that a reduction should be made in the number
and the amount of scholarship awards to entering students.
The savings created from this policy should be used to
support those students who have a need but who have also
performed satisfactorily on the campus.29
The research and analysis of available data during
the 1960's has reflected the growing concern about pro-
viding all students equal access to higher education. Work

32 and Morse33 are

done by King,30 Moon,31 West and Gleazer,
examples of reports which indicated that current financial
aid practices were not providing equitable treatment to

all social classes. This fact was further dramatized by

 

29Robert E. Iffert, "College Scholarship Funds--

Investment or Speculation," Higher Education, XIII (April,
1957), 146.

 

30King, "Financial Thresholds to College,"
pp. 21-22.

31Moon, "Financial Aid--From Application to Award,"
p. 15.

32West and Gleazer, "Who Gets the Scholarship?"
p. 4.

33
pp. 22-26.

Morse, "Our Groaning Financial Aid Structure,"

37

the presentations that were given at a panel discussion at
the annual conference of the National Association of Ad-

missions Counselors in Chicago on October 10, 1969.34

Student loans.--There are many variations both in

 

the amount of money available for student loans and also
in the extent to which they have been used. At one time
loans were a very unpopular source of aid. In 1944-1946,
only $3,700,000 of the $23,600,000 available for loans
was borrowed.35 Axt eXpressed the Opinion that students
were reluctant to utilize funds because most college loan
funds were very short-term. Short-term loans were all that
most institutions could provide because they did not have
the financial resources to establish a long-term program.
In order to make long—term loans available, Earl J.
McGrath, U.S. Commissioner of Education, proposed a plan
in 1949 which would permit individual loans up to $2,400
with the feature that they could be repaid within ten
years after completion of the educational program. The
loans were to be granted by local lending institutions
with the Federal government guaranteeing them. Less than

one-half of the educators polled relative to their Opinion

 

34A report of a panel discussion at the Annual Con-
ference of the National Association of College Admissions
Counselors, Chicago, October 10, 1969, National ACAC
Journal, XIV, Nos. 3 & 4, 20-24.

 

35Richard G. Axt, The Federal Gggernment and
Financin Hi her Education (New York: Columbia University
Press, I352), pp. 216-I7.

 

38

on this plan actually were in favor of it. Axt questioned
the desirability of encouraging students to obligate them-
selves to a large financial responsibility. He felt that
a student loan program was neither necessary nor desirable
because loans could only be considered as auxiliary means
of assisting students and not as a primary method of
equalizing educational Opportunities. He further felt
that the enactment of a federal loan program might elimi-
nate the possibility of obtaining a scholarship and loan
program.36

The editors of Changing Times reported the results
of a comprehensive survey that was made relative to college
loan programs in 1956. They said the results of the survey
caused them to advocate the use of loans to finance a col-
lege education. They felt that college attendance should
be possible for those students who cannot win scholarships
and who do not happen to have wealthy parents. Of the col-
lege administrators that took part in the survey, 96 per
cent agreed that a student should be willing to borrow.
They felt, however, that students going into a low income
field should borrow only as a last resort. It was felt
that students would be wiser to obtain loans rather than

postpone or interrupt college plans.37

 

361bid., pp. 217-18.

37Kiplinger Washington Editors, "Student Loans--
Their Place in Student Aid," Changing Times, X (February,
1956), 39-41.

39

A number of studies such as those undertaken by
F. R. Ormes38 and L. J. Ruegsegger39 have revealed that
students are good credit risks. A study financed by the
Harmon Foundation in 1924 found that some schools were
very unsuccessful with their loan funds. It appeared, how-
ever, that the administration of the funds rather than the
nature of the transaction was the source of the trouble.
If the method of administration was taken into consider-
ation, the proportion of funds overdue was far from alarm-
ing. The report suggested that the principles of commer-
cial lending should be applied to determine the amount of
money which the student could safely borrow. It was
further suggested that if money is to be loaned to a stu-
dent, then the amount should be sufficient to relieve him
of his financial burdens to such an extent that he may do
justice to his academic work without impairing his health.
It was felt that $2,000 was not too much credit to extend
to a student who has good health, is reliable, and ambitious

and shows signs of a promising future.40

 

38F. R. Ormes, "Repayment of Student Loans,"
College and University Business, XXI (July, 1956), 32-33.

39L. J. Ruegsegger, "Pay-As-You-Go Plan Really

Works," College and University Business, XXI (July, 1956),
33.

40L. J. Chassee, A Study of Student Loans and Their
Relation to Higher Educational Finance, A report prepared
under the authority of the Association of University and
College Business Officers of the Eastern State (New York:
Harmon Foundation, Inc., 1925), p. 99.

 

40

A report submitted by Robert C. Hall and Stanton
Craigie relative to the students who borrowed money during
the period from July 1, 1960 to November 1, 1960 from the
National Defense Student Loan Funds revealed that the pro-
gram had some significant impacts. In 92 per cent of the
cases a student loan apparently determined whether the
borrower would be able to enter or stay in college. The
loans permitted 55 per cent of all borrowers to reduce
their hours of part-time work. The loan program also en-
abled 16 per cent of the borrowers to change their student
status from part-time to full-time. For 77 per cent of
the borrowers, the NDSLP was the only source of loan funds.41

A report issued by the Subcommittee on Education
of the House of Representatives indicated that 16 per cent
of the amount due on the National Defense Student Loan
Program was delinquent. In some respects the figure was
even worse than it appeared because 47 per cent of the
amount due was either deferred because the students were
in school or in service or cancelled because the students
had gone into teaching. Only $6,500,000 of the $9,500,000

due was collected. An analysis of the delinquencies indi-

cated that the administrative machinery of the college was

 

41Robert C. Hall and Stanton Craigie, Student
Borrowers--Their Needs and Resources, U.S., Department of
Health, Education, and Welfare (Washington, D.C.: Govern-
ment Printing Office, 1962), pp. 12-13.

41

more often at fault than the students.42 This was con-
sistent with the experience of the Harmon Foundation.43
Surveys conducted by Abate44 and Hill45 in 1963

and 1965, respectively, found that the source of the trouble
in the colleges and universities was that they did not have
experienced individuals handling the loan programs. It was
found that colleges often employed inexperienced personnel
to handle loan programs who did not advise students of
their responsibility to repay and did not keep accurate
records with which to trace students. The survey which
Abate directed for the American National Bank of Chicago
for the Associated Colleges of the Midwest revealed that
colleges with an enrollment of approximately 1,000 stu-
dents generally had an average of $300,000 in outstanding
loans.46 This figure was larger than the average consumer
loan portfolio of 12,947 or 92.8 per cent of the commercial

banks in the country. In addition, Hill warned that the

 

42Nash, "Student Financial Aid, College and Uni-
versity,” p. 1353.

43Chassee, A Study of Student Loans, p. 99.

 

44Robert Abate, "How to Collect NDEA Loan Repay-
ments," Colle e and University Business, XXXV (December,
1963), 34.

45W. W. Hill, Jr., "An Analysis of College Stu-
dent Loan Programs," United Student Aid Funds, Inc., 1965.

46Abate, "How to Collect NDEA Loan Repaymentsr"

p. 34.

42

collection problem would be extremely expensive because of

poor administrative procedures.47

Student Employment.--Founta Green Pollard and
48

 

Russell T. Sharpe in the 1950 edition of the Encyclopedia

 

of Educational Research summed up the results of research

done by J. K. Archer,49 A. B. Crawford,50 Abraham Krugman,51

R. T. Sharpe,52 and J. J. Umstattd.53

 

They concluded that
a majority of the studies showed that students who engaged

in part-time work attained higher scholastic standings and

 

47Hill, "An Analysis of College Student Loan Pro-

grams."

48Founta Greene Pollard and Russell T. Sharpe,

"Student Personnel Work--Student Financial Aid," Encyclo-
pedia of Edueational Research, ed. by Walter S. Monroe
(New York: The Macmillan Company, 1950), pp. 1347-53.

49J. K. Archer, "A Study of New York State Scholar-
ship Students at Cornell University" (unpublished Master's
thesis, Cornell University, 1934), p. 195.

50A. B. Crawford, Incentives to Study (New Haven:
Yale University Press, 1929), p. 194.

 

51Abraham Krugman, "A Comparison of Grades of
Scholarship Students and All Students in Washington" (un-
published Master's thesis, Square College of New York Uni-
versity, 1932).

52R. T. Sharpe, Financial Assistance for Colle e
Students, Series VI, Student Personnel Work No. 7 TAmerlcan
Council on Education, 1946), p. 113.

 

53J. G. Umstattd, "Student Self-Support at the
University of Minnesota (Minneapolis: University of
Minnesota Press, 1932).

43

received a smaller proportion of the failures. They were
also convinced that a reasonable number of hours devoted
to part-time work produced little effect upon grades and
health but did tend to curtail social activities especially

for freshmen and sophomores. Subsequent research con-

ducted by C. W. Reeder and S. C. Newman,S4 D. L. True-

55 R. E. Silver,56 Dickinson and Newbegin,57 M.

Schaffner,58 D. M. Burke,59 and H. B. Baker60 also seemed

blood,

to indicate that employment had no discernible effect on

achievement. Williamson conducted research relative to the

 

54C. W. Reeder and S. C. Newman, "The Relation of
Employment to Scholarship," Educational Research Bulletin,
XVIII (November, 1939), 203-04.

55D. L. Trueblood, "Academic Achievement of Em-
ployed and Non-Employed Students in the Indiana School of
Business," Dissertation Abstracts, XIV, 643-44.

 

56Robert E. Silver, "The Effect of Self-Support
Upon Student Success in Walla Walla College," Dissertation
Abstracts, XVI, Part 2 (1956), 1819-20.

 

57C. Dickinson and Betty Newbegin, "Can Work and
College Mix?" Personnel and Guidance Journal, XXXVIII
(December, 1959), 314-17.

 

58Martha Schaffner, "A Comparison of Scholastic
Success of Employed and Non-Employed College Students"
(unpublished Master's thesis, Kansas State Teachers
Colleges, 1936).

59Dustin M. Burke, "Student Employment--An Under-
develOped Resource," Financial Aid News, III (1963), 4.

 

60Harold E. Baker, "The Working Student and His
Grades," Journal of Educational Research, XXXV (September,
1941), 35.

44

grades received by students who were awarded NYA assistance.
He concluded that the higher grades of the students re-

ceiving NYA assistance was more related to their scholastic
aptitude rather than motivating effect of the work-scholar-

ships. The NYA subsidized only those students who had

proven themselves to be good academic risks.61

Axt felt that most educators would agree to the
following points relative to work:

1. Part-time employment may have some educational
value even for students who do not need the money.
2. Working more than fifteen hours per week could
interfere with a well rounded educational program.
3. There seldom are as many jobs available as there
are deserving applicants.
4. An expanded work-aid program such as the NYA,
even at its best effectiveness, can not rovide
equalization of educational opportunity. 2

In addition to the financial remuneration that

64 felt

employment can provide, Williamson63 and Armsby
that there are other benefits which the student may derive.
Some of these may include personal and group responsi-

bility, the development of desirable character traits, and

 

61Edmund G. Williamson, "College Graduates and NYA
Scholarships," School and Society, XLVI (October, 1937),

62Axt, The Federal Government and Financing Higher
Education, p. 2l7.

 

63Williamson, "College Graduates and NYA Scholar-
ShiPS'" 510-120

64Henry H. Armsby, "COOperative Education in the

United States," U.S. Department of Health, Egucation, and
Welfare Bulletin No. 11 (Washington, D.C.: Government
Printing Office, 1954), p. 15.

 

45

the provision of valuable try-out experiences. A survey
at Ohio State University revealed that almost 90 per cent
of the students participating in the NYA program felt that

their experience was educationally valuable to them.65

Research on the Relationshi
3? Financial Aid to College
Attendance

 

 

 

The relationship which exists between a student's
attendance at college and the financial aid available to
him is very complex. The results of a large national sam-
ple taken by the Project Talent Study concluded that be-
tween 80,000 and 100,000 students in the upper one-third
of the 1960 high school graduating class failed to enter
college at least partially for financial reasons. Approxi-
mately 40 per cent of the National Merit Scholarship
examinees failed to go on to college for financial rea-
sons.66 Sanders and Palmer indicate that economic barriers
may impede prospective college-bound students by: (1) pre-
venting enrollment, (2) increasing the number who drop out,
(3) delaying the completion of the program by limiting

attendance to part-time, or (4) forcing the student to

 

65Betty and Ernest K. Lindley, A New Deal for Youth
(New York: The Viking Press, 1938), p. 167.

66Nash, "Student Financial Aid, College and Uni-
versity," p. 1347.

46

choose a program of studies or an institution which may

not be apprOpriate for his abilities or interests.67

69 70 71

Berdie,68 Wolfle, Cole, McClelland, and

Little72

reached conclusions that indicate that the prac-

tice of offering additional scholarship aid to students of
high ability and low aspiration may not by itself have the
desired impact upon their educational plans. While family
income may be an excellent index of the probability that a
student will attend college, it does not always constitute
the determining factor. Herriot found that economic per-

formance was the second lowest of nine variables that were

significantly related to the level of educational aspir-

ation. This was consistent with Brazer's findings as he

 

67J. Edward Sanders and Hans Palmer, The Financial
Barrier to Higher Education in California (California
State Scholarship Commission, 1965).

 

 

68R. F. Berdie, After High School--What? (Minnea-
polis: University of Minnesota Press, 1954).

 

69Dale Wolfle, America's Resources of Specialized
Talent (New York: Harper, 1954).

 

70Charles C. Cole, Jr., "Current Loss of Talent
from High School to College: Summary of a Report," Higher
Education, XII (September, 1955), 35-38.

 

71David C. McClelland, and others, Talent and
Society (Princeton, N.J.: VanNostrand, 1958), p. 95.

 

72James K. Little, Ex lorations into the College
Plans and Experiences ofiHig SchoOl Graduates (Madison:
University of Wisconsin Press, 1959), p. 95.

 

 

47

found that the economic factor should not rate any higher
than sixth in a scale of twelve factors affecting college

attendance.73

Cole found that 90 per cent of 1,600 stu-
dents who had requested scholarships still went to college
even though they were denied aid.74 Research results of a
project undertaken at the University of New Mexico indi-
cated that only 1 per cent of the state's high school grad-
uates who had both the competence and the motivation to
attend college actually lacked the money to do 30.75
Nash concluded that a scholarship program without
a need factor which is announced only to high school
seniors will have little impact on the college going plans
of talented students. In order to reach students from low
income families who can benefit from higher education but
are not endowed with superior talent, a program of counsel-
ing and careful liaison between high schools and colleges

in addition to financial aids will be required.76

 

73Harvey E. Brazer and others, Income_and Welfare
in the United States (New York: McGraw-Hill Book Company,
I963).

 

 

74Charles C. Cole, Jr., "Scholarship Applicants
Today," College Board Review, XXXII (Spring, 1957), 17.

 

75Sherman E. Smith, Howard V. Mathany, and
Merle M. Miles, "Are Scholarships the Answer?" A report
on a scholarship program for students of limited means
(Albuquerque: University of New Mexico, 1960): P. 87.

76Nash, "Student Financial Aid, College and Uni-
versity," p. 1349.

48

The_Relationship of Financial Aid
to PerSistence in College

 

 

Research conducted by J. H. McNeely,77 Robert C.

Nichols,78 G. R. Moon,79 Fred T. Mitchell,80 Paul L.

Dressel,81 F. D. Greene,82 James D. Cowhig,83 Benjamin

84 5 86

Quales, J. C. Esty,8 Ruth Weintraub and Ruth E. Salley,

 

77J. H. McNeely, College Student Mertality, Office
of Education Bulletin No. 11 (Washington, D.C.: Government
Printing Office, 1937).

 

78Robert C. Nichols, "A Study of Student Mortality
for the Freshman Class of 1947-1948 at State College of
Washington" (unpublished Master's thesis, State College Of
Washington, 1949). '

796. R. Moon, "The Student Who Drops Out of Col-
lege," School and Society, XXVII (May, 1928), 576-78.

 

80Fred T. Mitchell, "Why Freshmen Leave College,"
Journal of Higher Education, XIII (January, 1942), 95-100.

81Paul L. Dressel, "Liberal Arts Students Advised
to Withdraw," Journal of Higher Education, XIV (January,
1943), 43-45.

 

82F. D. Greene, "Follow-up Study of Non-Graduating
Women from the College of Education of the Ohio State Uni-
versity," Educational Administration and Supervision, XXIX
(October, I943T, 427-33.

83James D. Cowhig, "Why Do They Leave College?"
School Review, LXXI (Autumn, 1963), 333-34.

 

84Benjamin Quales, "Student Separations from Col-
lege-Overview," Association of American College Bulletin,
XXXV (October, 1949), 404-09.

 

85John C. Esty, Jr., "College DrOpouts 'Real Problem'
What to Drop Into?" College Board Review, LXII (Winter,
1966-1967), 20-21.

86Ruth G. Weintraub and Ruth E. Salley, "Graduation
Prospects of an Entering Freshman," Journal of Educational
Research, XXXIX (October, 1945), 1163126.

 

 

49

87 88 89

D. W. Irvine, Iffert and Clarke, C. L. Koelsch, and
Alexander Astin90 indicates that economic pressures have a
considerable amount of influence on the decision of a stu-
dent to withdraw from college. Goetz and Leach, however,
concluded from a survey conducted at the University of New
Mexico in 1962 that the real causes for withdrawal of stu-
dents from college may not have yet been discovered. They
found many students continuing on in college with attitudes
and financial difficulties very similar to those of some

of the students that had left college. It was found that
such problems as marriage, family finance, and general un-

happiness are generally more important to the drop out than

to the student who continues on in college.91 John C. Esty

 

87Donald W. Irvine, "University DrOp Outs in Good
Standing," National Association of Colle iate Admissions
Counselors Journal, XII, No. l (l966-l967), 14-19.

88Robert E. Iffert and Betty S. Clarke, College
Applicants, Entrants, Dropouts (Washington, D.C.: Govern-
ment Printing Office, 1965), p. 27.

 

 

 

 

89Charles L. Koelsche, "A Study of the Student
DrOp-Out Problem," Journal of Educational Research, XLIX
(January, 1956), 357-64.

 

90Alexander Astin, "Personal and Environmental
Factors Associated with College DrOpouts Among High Apti-
tude Students," Journal of Educational Psychology, LV
(August, 1964), 219-27.

 

91Walter Goetz and Donald Leach, "The Disappearing
Student," Personnel Guidance Journal, XLV (May, 1966),
883-87.

 

50

expressed the Opinion that financial reasons are given more

frequently because they seem to be more socially accept-

able.92

The Administration of Student
Financial Aid

 

 

Until recent years, the number of man-hours spent
on the administration of student financial aid programs
was very few in number. In some cases it was conducted by
a single person such as a dean who assumed responsibility
for the program as a part-time duty. Occasionally, a
staff functioning as an ad hoc committee assembled to con-
duct the program in an intuitive and benevolent manner.
However, as the resources for student financial aid in-
creased in importance both to the institution and to the
students and as the number of students seeking aid in-
creased, the Operations of the student financial aid pro-
grams have been reconsidered. Specific individuals have
been assigned the responsibility for the administration of
the program and they occupy well defined positions in the
administrative organization of the institution. Because
the program of financial aid has generally come to be con-
‘sidered as one of the student services in institutions of

higher learning, it has become common practice to have

 

92Esty,"College Dropouts 'Real Problem' What to
DrOp Into?" pp. 20-21.

51

the financial aid administrator report to the chief ad-
ministrator for student services.93
At the present time the financial aid practices of
American colleges and universities are going through a
period of unusual change in concept, change in methods and
organization, and change in source and control of funds.
Further, the administration of financial aid has become a
large and diffuse enterprise due to the public concern
about the increasing costs of college, the loss of talent
due to high aptitude students not going on to college, and

the problems of the disadvantaged.94 Moon,95 Clough,96

West,97 and Russell98 call attention to the confusion that

exists in the financial aid programs of institutions of

 

93Van Dusen and O'Hearne, A Design for a Model
College Financial Aid Office, pp. 23-24.

 

 

94Gross, "A Critique of Practice in the Adminis-
tration of Financial Aid," p. 263.

95R. G. Moon, Jr., "Who Should Get What Aid from
the College?" In Search for Talent:_College Admissions
No. 7 (New York: College Entrance Examination Board, 1960),
pp. loo-06.

96J. E. Clough, Jr., "Colleges Must Close Ranks
on Financial Aid," College Board Review, XLVII (Spring,
1962), 27.

 

 

97West, Background for a National Scholarship
Policy, p. 77.

98John D. Russell, The Finance of Hi her Education
(Chicago: University of Chicago Press,’l954 , p. 233.

 

52

higher education. Every college has scholarships, jobs,
and loans to offer needy students but this is the extent
of the consistency. The manner in which these forms of
assistance are used to meet the needs of the students are
very diverse and indicate a lack of common goals between
and within institutions. Even though there have been
questions raised relative to the adequacy of the financial
aid administrative effort, the field still continues to
grow without visible direction.

Administration to Meet
Institutional Needs

 

 

There appears to be two underlying views that
characterize the administration of financial aid prOgrams.
The first view has been identified as the administrative
view. Schools that adhere to this view believe that the
purpose of financial aid is to meet institutional ob-
jectives. Schools practicing this belief might use finan-
cial aid to fill a specific curriculum or dormitories, to
change the character of a student body geographically,
socioeconomically, or intellectually. Some educators would
argue that the diverse uses of financial aid have been good
because it has permitted institutions of higher education
to be diverse which in turn has been the real strength of
American higher education. Still other educators would
argue that the use of financial aid to meet institutional
Objectives is justified in that it preserves an oppor-

tunity of choice for prospective college students. This

53

represents, however, a distortion of the facts as the
public has generally been led to believe that the ultimate

purpose of financial aid is to help poor boys and girls

to go to college.99

Administration Which Has a
Personnel Point of View

100

 

 

and LiftonlOl

Mueller express the opinion that
student personnel work reflects the value placed on the
inherent worth and capacities of the individual so that
the society in which he lives can progress. From this
view of personnel work, the second philOSOphy which guides
the administration of financial aids develOped. Programs
being administered by the personnel point of view believe
that the best interests of the students should be the
criteria by which aid is awarded. This view makes pro-
vision for individual differences and recognizes the indi-
vidual as a functioning whole. It also takes the view
that work with students must begin where they are rather

than where they are expected to be. Since this point of

view has the possibility of increasing the student's

 

99Gross, "A Critique of Practice in the Adminis-
tration of Financial Aid," p. 270.

 

100Kate H. Mueller, Student Personnel Work in
Higher Education (Boston: Houghton Mifflin, l96l),

 

p. 49.

101Walter M. Lifton, "Colleges and Universities--
Student Services," Encyclopedia of Education Research,
ed. by Chester W. Harris (New YorE: The Macmillian Com-
pany, 1960), PP. 300- 06.

 

 

54

effectiveness, self awareness, and sense of responsi-
bility, the institution as well as society can benefit.
The personnel approach, however, is still unevaluated and
cannot be justified by concrete evidence of performance.
An adequate basis for the develOpment of a rationale to
guide financial aid practices cannot be developed from a
personnel point of view that is vague and of little sub-

stance.102

Current Status of Financial
Aids Administration

 

 

In 1966, Gross saw some developments that he
thought could provide the beginning steps toward a re-
alignment of financial aid purposes and practices in terms
of basic function. He felt that the creation of the Com-
mission on Financial Aid by the American College Personnel
Association was an indication of the growing concern about
the responsibility of personnel workers for financial aid
practices. The development of a profession outside of the
personnel field, however, might be the result of the re-
gional associations that were created for Financial Aid
Administrators. The support which a training program dur-
ing the summer of 1964 received was an indication that the
problems of training financial aid administrators were
being recognized. The training program was a joint effort

by the American College Personnel Association, the College

 

102Gross, "A Critique of Practice in the Adminis-
tration of Financial Aid," pp. 268-70.

55

Scholarship Service, and the Western Interstate Commission
for Higher Education. Gross felt that some of the research
being done at that time was an indication that the practi-
tioners were beginning to get ready to face the problems
of administering financial aid.103

Research conducted by Paul F. Lazarsfeld and
George Nash provided the basis for Nash to make some ob-
servations relative to the current status of financial
aid administration. He expressed the opinion that there
are some very positive characteristics about the current
status of financial aid administration. Foremost was the
fact that the average administrator was well-qualified,
experienced, and was being reasonably well compensated
for his work. The size and complexity of financial aid
programs provided the impetus to establish the director
rather firmly in the administrative hierarchy of colleges
and universities and also provided a source of power and
prestige. The autonomy which most financial aid offices
have also made it possible for most aid administrators to
see their job as a guidance function rather than just an
‘administrative or bookkeeping function. Nash saw this as
perhaps being one of the most important reasons for the
maturation of student financial aids.

An examination of the weak points of financial

aid administration caused Nash to conclude that it still

 

103Ibid., pp. 270-71.

56

had a long way to go in terms of occupational maturity.
Lack of research in the field has been the result of either
no expertise or time. Since there is no single journal
devoted exclusively to financial aid research, the research
which has been done is scattered throughout a large number
of publications and books. Even though state and regional
associations have been formed, there still is no national
association of financial aid administrators. Another major
sign of occupational immaturity is that aid administrators
have not had much voice in influencing legislation at
either the national or state level. Lack of maturity of
the profession is further indicated by the high degree of
turnover among aid administrators. In a random sample of
fifty colleges, it was found that there was a 38 per cent
turnover between the academic years of 1965-1966 and 1966-
1967. Occupational immaturity is also indicated by the
lack of movement between colleges by aid administrators.
The placement and recruitment functions which a profes-
sional association would provide would make it possible to

spend one's entire career in the field.104

Recent Developments in
Financial Aid Adminis-
tration

 

Financial assistance to undergraduates is the re-

sult of a variety of programs as diverse as the

 

104George Nash, "The Current Status of Financial
Aid Administration," National Association of Colle iate
Admissions Counselors Journal, XIII, No. 2 (1969-1370),
5-8 0

 

 

57

institutions that the students attend. The lack of con-
sensus relative to what constitutes a good financial aid
program perhaps is due to the sensitivity that colleges

and universities have about sharing with the public that
information which pertains to the manner in which they
award financial aid. Moon suggests several reasons why
institutions are extremely reluctant to commit themselves
in print. First, the standards for awarding aid and the
resources available seem to be constantly changing and also
the nature of some of the information is such that it must

remain confidential.105

Another reason was suggested by
Dyer after he reviewed the results of a study which he
undertook. He stated that, "most colleges and universities
are not quite sure of what is going on in their own shops

106 It was indi-

and are sometimes hard put to find out."
cated that this situation perhaps was the failure of
schools to establish a clearly defined institutional re-
search program relative to their financial aid program.107
Howe recognized two recent developments that he

felt would reduce the areas of disagreement among

 

105Rexford G. Moon, Jr., Student Financial Aid in
the United States; Administration and Resources (New York:
College Entrance Examination Board,‘l963). P. 2.

 

 

106Henry S. Dyer, "Understanding Financial Aid
Problems Through Institutional Research," Student Finan-
cial Aid and Institutional Purpose (Princeton: College
Entrance:Examination Board, 1963), P. 56.

1°7Ibid., pp. 56-58.

58

institutions and could also refine the financial aid award
procedures. He urged all schools to consider the possible
advantages of the packaging concept which calls for a
combination of gift aid and self-help aid. For instance,
he feels that schools which offer straight gift scholar-
ships to meet a student's need are adhering to a wasteful
and indiscreet policy. Even though colleges may want to
continue to determine need with the same assessment tech-
niques that they have, they should fulfill no more than
two-thirds of a student's need with gift aid. This policy
has the possible advantage of reducing by approximately
one-third the total amount spent by institutions for gift
assistance. This could be very significant saving for
those private schools that support their scholarship pro-
grams from current operating funds. This practice also
encourages students to assume the initiative in taking
advantage of a large number of outside loan programs pro-
vided by the Federal Government, the states, private
agencies, and commercial enterprises. Further, if gift
aid is supplemented by a relatively open-ended offer of
self-help the student and his parents will help select
their own need by deciding the amount and the form of
self-help that will complete the package. The ultimate
need, therefore, will not be established by the insti-
tution but by the student in cooperation with his parents.
Another advantage of the packaging concept arises when

students have been awarded gift aid assistance by agencies

59

outside the academic community. For example, if a college
should meet a student's total need by gift aid, they would
be in a difficult position to make an adjustment in the
student's aid package should he subsequently receive gift
aid from a source not related to the institution. How-
ever, if self-help comprised part of the student's aid
package, he probably would elect to use his gift aid award
to reduce his self-help obligation. This in turn would
make more self-help available to other students.

The second develOpment which Howe wished to sup-
port was the concept Of centralization in the adminis-
tration of financial aid. Centralization permits each
financial aid request to be thoroughly analyzed and con-
sidered and also provides for greater flexibility in
determining how a particular student's need can best be
met. In addition, duplication of record keeping is re-
duced or eliminated and the students cannot put depart-
ments into a competitive bidding situation as they seek
various forms of help within the college. Howe also
urged the extension of the centralization concept through
voluntary agreements between schools which have com-
parable policies On admission and aid, and a sizeable
group of common candidates. In fact, he felt that if his
case for the packaging of awards was to win acceptance,
there would have to be some definite inter-institutional

packaging policies relative to gift aid since it seems to

60

be the basis of competitive bidding between schools.
Financial aid officers should assume the responsibility of
ensuring that educational, rather than financial consider-

ations dictate a student's college choice.108

Summary

Recent changes in basic philosophy, specific
problems, and techniques are indications that student
financial aid in the United States is a dynamic activity
which is still in a formative state. The changing patterns
in financial aid tend to reflect current long-range national
and international concerns. Since the ultimate goal of
student financial aid programs is to remove the economic
barriers to higher education, their primary purpose has been
to provide assistance to students who, without such aid,
would be unable to attend college. Consequently, there is
little doubt any longer that need should determine who
will receive aid from an institution and in what amount.
Further, the national interest in expanding the equality
of educational opportunity has caused financial assistance
to be extended to all needy able students rather than just
the intellectually elite.

An increasing amount of money from an increasing
variety of sources has provided a significant increase in

the amount of money available for financial assistance to

 

108Arthur Howe, Jr., "Centralizing Student Aid
Activities," Student Financial Aid_end Institutional Pur-
gose (Princeton: College Enlrance Examination Board,
)3 Pp. 46-55.

 

61

college students. The total amount available is comprised
of grants and scholarship which are forms of gift aid and
loans and employment which are forms of self-help. So

that gift aid might be distributed in an equitable manner,
the concept of packaging was developed. Unfortunately,
extensive research has revealed that a class bias existed
in respect to the manner that gift aid was distributed.

The higher a student's socio-economic class, the more
likely it was that his award would be comprised of a dis-
prOportionate amount of gift aid. The Economic Opportunity
Grants Program was designed to equalize the distribution of
gift aid. No research projects, however, have been re-
ported which would indicate whether or not this has

happened.

CHAPTER III

DESIGN OF THE STUDY

The design of this study is described under four
main headings: (1) Sample Selection, (2) Sources and
Nature of the Data, (3) Testable Hypotheses, and (4)

Analysis Procedures.

Sample Selection
The sample was comprised of all first semester
freshmen students at the University of South Dakota who
were awarded financial assistance from unrestricted sources
for the 1969-1970 academic year. A total of 170 students

was included in the study.

Sources and Nature of the Data

 

Records maintained at the Office of Financial Aids
at the University of South Dakota provided the data re-
quired to conduct the study. Grand point averages for the
students were computed to the nearest one thousandth. The
total number of grade points for a student was computed by
assigning the following values to letter grades: (1) four

points for A, (2) three points for B, (3) two points for C,

62

63

and (4) one point for D. The grade point average (G.P.A.)
was computed by dividing the total number of grade points
by the number of credit hours for which the student was
registered during the first semester. The high school
grade point average was determined by dividing the stu-
dent's total number of grade points by the number of units
for which he received credit on his high school transcript.
The student's high school class rank was computed to the
nearest one-tenth percentile rank.

The student's financial need was secured from the
analysis of the Parents' Confidential Statement by College
Scholarship Service. The suggested practice of rounding
the student's need to the nearest fifty dollars was not
done initially by the Office of Financial Aids. Conse-
quently, this was not done in the application of the pro-

posed financial aids policy.

Testable Hypotheses

The 170 students included in this study were
ordered according to need and then divided into five
groups. The testable hypotheses, which pertain to the
five groups, were stated in the null form since it was
hypothesized that no significant difference existed among
the groups with respect to various characteristics.
Therefore, a rejection of the null hypothesis would lead

to the conclusion that the groups would differ

64

significantly with respect to the characteristic under
consideration.

The primary hypothesis that a bias existed in the
manner which financial aid awards were made at the Uni-
versity of South Dakota was tested by the following sub-
hypotheses.

Hl(a): There is no significant difference in the
mean relative aid awards among the five
groups.

Hl(b): There is no significant difference in the
mean prOportion of the gift aid in the
awards among the five groups.

The following sub-hypotheses were tested with re-
spect to the primary hypothesis that the students with the
least need would have the most promising academic profiles
with respect to high school class rank, high school grade
point average, and ACT composite score

H2(a): There is no significant difference in the
mean high school grade point averages
among the five groups.

H2(b): There is no significant difference in the
mean high school class ranks among the
five groups.

H2(c): There is no significant difference in the
mean ACT composite scores among the five
groups.

H2(d): There is no significant difference in the
mean expected first semester grade point
averages among the five groups.

H2(e): There is no significant difference in the

mean first semester grade point averages
among the five groups.

65

The following hypothesis will be tested with regard
to the exploratory question concerning the possible associ-
ation of a student's work status with his predicted first
semester grade point average. This hypothesis is not stated
in the null form.

H3: The student's work status, when combined with

his high school grade point average, high
school class rank, and ACT composite score,

will increase the precision of the prediction
of first semester grade point average.

Analysis Procedures

 

Analysis of variance, multiple regression analysis,
the Tukey(a) procedure, and the test of significance be-
tween two multiple correlation coefficients comprised the
procedures employed in the statistical treatment of the
data. The IBM 1130 Statistical System analysis of vari-
ance and stepwise linear regression programs were used to
perform the computational work.1

The first step in the analysis procedure was to
order, according to need, the 170 students included in the
study. The ordered population was then divided into
quintiles. For identification purposes, the quintiles

were labeled I through V with Group I being composed of

the thirty-four students with the least need and Group V

 

1International Business Machines, 1130 Statistical
System (1130-CATO6XO) Users‘Menual (White Plains, N.Y.:
IBM Technical Publications Department, 1967), pp. 7-21,
72‘86 o

66

being composed of the thirty-four students with the
greatest need.

The next step was to select a level of statistical
significance for the testing of the hypotheses. The .05
and the .01 levels have been widely advocated.2 Prior to
selecting a level, consideration was given to the two types
of errors related to the level at which an hypothesis is
tested. Type I errors are referred to as the significance
level of the test and can be set at the desired level which
the experimenter desires to risk the possibility of re-
jecting a true hypothesis.3 For example, the .05 level
means that an obtained result which is significant could
occur by chance only five times in 100 trials.4 Type II
errors involve the failure to reject assumptions when they
are actually false. Therefore, for any given test, the
probabilities of Type I and Type II errors are inversely
related. Thus, it is impossible to minimize the risks of
both types of errors simultaneously since the chances for
a Type II error are increased as the chances for a Type I

error are reduced. Therefore, the decision as to which

 

2Fred N. Kerlinger, Foundations of Behavioral Re-
search (New York: Holt, Rinehart, and Winston, Inc.,
I964), pp. 153-55.

 

3Hubert M. Blalock, Jr., Social Statistics (New
York: McGraw-Hill Book Company, I960), pp. l23-28.

4Kerlinger, Foundations of Behavioral Research,
pp. 154-550

67

significance level to select should reflect the researcher's
evaluation of the possible consequences for each type of
error.5 A Type II error in this study would have involved
the failure to reject those assumptions which state that

no bias exists when they actually are false. Since a Type
II error would permit the inequitable treatment of students
to go undetected, it would represent the most serious error
from a student personnel aspect. Consequently, it was
decided to use the .05 level because it provided the least
chance of commiting a Type II error.

In accordance with procedures outlined by Hays, a
simple one-way analysis of variance was used to test those
hypotheses which pertained to the equality of means among
the five groups.6 The Tukey(a), which is called the
honestly significant difference, was used as a posteriori
test to determine which pairs of means were significantly
different whenever the analysis of variance test indicated
that a significance did exist. The studentized range sta-
tistic was used to compute the critical value for identify-
ing significant differences. In symbols, the following

formula was used to compute the critical value:

 

SBlalock, Social Statistics, p. 125.

 

6William L. Hays, Stagistics for Psycholo ists
(New York: McGraw-Hill Book Company, l960T, pp. - 8.

 

68

 

/ MS error
n

ql_a(k.f)
where
k = the number of groups
f = the degrees of freedom for Mean Square error
l-a = the level of the test

q = the range statistic

n = the number of observations in each group.

Whenever the difference between any two means was greater
than the critical value, they were considered significantly
different.7
In order to determine if there was an association
between the student's grade point average and his work
status, a test of significance was conducted relative to
the difference between two multiple correlation coef-
ficients. The three variables of ACT composite score,
high school grade point average, and high school class
rank were used in a multiple regression equation to pre-
dict first semester grade point average. The dichotomous
variable of "work" or "no work" was added to these three
variables and a new multiple correlation coefficient was
computed. To determine if the addition of this variable

significantly improved the prediction of the first semester

grade point average, a test of significance was conducted

 

7W. J. Winer, Statistical Princi les in Ex eri-
mental Design (New York: McGraw-Hill, IE62I, pp. 77-89.

 

69

for the difference between two multiple correlation co-

efficients in accordance with the procedure used by Wert,

Neidt, and Ahmann.8

Development of the Proposed
Packaging Policy

The proposed packaging policy was develOped from

 

the consideration given a considerable number of ideas and

theories. A review of pertinent literature, current poli-

cies in effect at several institutions, and the Opinions of
the individuals concerned with financial aid awards at the

University of South Dakota were incorporated into the pro-

posed plan.

The structure of the financial aid packaging policy
was restricted in several ways. First, the prescribed
regulations for the awarding of Economic Opportunity Grants
for the 1969-1970 academic year as outlined in the Economic
Opportunity Grants Program Manual of the United States De-
partment of Health, Education, and Welfare were incorpor-
ated in the proposed policy. The prescribed regulations
were as follows:

1. In order for a student to be eligible for a grant,
the institution's need analysis system must indi-
cate that his parents' contribution to his edu-
cational expenses cannot exceed $625.00

2. A grant may not be made for less than $200.00 or
for more than $1,000.00.

 

8James E. Wert, Charles 0. Neidt, and J. Stanley
Ahmann, Statistical Methods in Educational and Psycho-
logical Research (New York: Appleton, Century, Crofts,
Inc., 1954), pp. 237-49.

 

70

3. A grant must be matched by an equal amount from
other institutional resources.
4. The amount of the grant should be rounded to the
nearest fifty dollars.9
Second, the packaging policy award formulas were developed
so that neither the amounts of certain types of aid nor
the total amount initially awarded to the students would
be exceeded.

The total need of the 170 students in this study
as determined by the need assessment of the Parents' Confi-
dential Statement was $176,946.00. The resources avail-
able were $142,125.00. Consequently, the need exceeded the
available resources by $34,821.00. By mathematical compu-
tation, it was found that if each student would assume the
responsibility of meeting the first $230.00 of his need,
the remainder of his need could be fulfilled by the re-
sources available. Therefore, $230.00 was subtracted from
a student's need in order to determine the amount of aid
he would be awarded. After the size of the student's
award was established, his financial aid package was deter-
mined by Table 3.1.

The exploratory question relative to the impact of
the proposed financial aid packaging policy was studied

with respect to the number of students who might not have

enrolled at the University of South Dakota had their

 

9Economic Oppoptunity Grants Pro ram Manual, U.S.
Department of Health, Education, and Wel are, Office of
Education, Bureau of Higher Education (Washington, D.C.:
Government Printing Office, 1969), p. 89.

 

71

 

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72

awards been determined by it. The pertinent data relevant
to this exploratory question was collected by conducting an
interview with a probability sample of the students who
would have received a less desirable aid package. The
interview technique was used so that a depth of response
was possible. In addition, it provided an opportunity to
check the truthfulness of the responses by seeking related
information at various points in the interview.10 A dis-
prOportionate sample was used to insure that two particular
categories of students were adequately represented in the
sample. One category was comprised of those students who
would have received no financial aid because their need
was not great enough. The other category was comprised
of those students who would have had their award sub-
stantially reduced because their original award exceeded
their need. These groups were of particular interest
since they obviously would have been the individuals most
likely not to enroll if the proposed packaging policy had
been in effect. In addition, the initial awards made to
these students reflected the Opinion that they would en-
hance the student body because of their academic records.
The interview was informally structured but con-
ducted in such a manner that the answer to the following

question could be elicited:

 

10John W. Best, Research in Education (Englewood
Cliffs, N.J.: Prentice-Hall, Inc., 1959), pp. 167-69.

73

Would the student have attended the University of

South Dakota had his financial aid award been

determined by the prOposed packaging policy?

The answer to this question was sought by a series of
related questions. These were as follows:

1. At what other colleges or universities did
the student complete all the requirements for
admission? How many schools accepted him for
admission?

2. At what other colleges or universities did the
student apply for and subsequently receive a
financial aid award?

3. Did the student receive any financial aid
awards in recognition of his high school
activities or academic performance?

4. How would the student's post high school plans
been changed if the University of South Dakota
had not awarded him financial assistance?

If the student indicated that he would have attended the
University of South Dakota even though he would have re-
ceived no financial assistance, the interview was termi-
nated. If the student indicated, however, that he would
have attended another college or university or was uncer-
tain as to how his plans would have changed, he was asked
to react to the hypothetical award which the proposed
packaging policy would have provided for him. The inter-
view was concluded as soon as the student indicated how his
plans might have been changed.

A weighted factor related to the sampling fraction

for the disprOportionate stratified sample was used to

determine the percentage of students receiving less de-

sirable aid packages who would not have enrolled at the

74

University of South Dakota. In symbols, the following

formula was used to determine the mean for the sample.11

"ML"

N?
_n1hh
st - N

“H

Since decisions made relative to this finding are adminis-
trative rather than statistical, no test of significance

was conducted.

Summary
The 170 freshmen students at the University of

South Dakota who were awarded financial assistance from
unrestricted funds for the 1969—1970 academic year com-
prised the sample. The students in the sample were ordered
according to need and then divided into five groups. An
analysis of variance was conducted to determine if equality
existed among the means of the five groups with respect to
the following: (1) high school grade point average, (2)
high school class rank, (3) ACT composite score, (4) pre-
dicted first semester grade point average, (5) actual first
semester grade point average, (6) relative aid award, and
(7) percentage of gift aid in the financial aid award. If
a significance was found, the Tukey(a) procedure was used
to determine between which pairs of means the significance

existed. A proposed financial aid packaging policy was

 

11William G. Cochran, Sam lin Techniques (New
York: John Wiley and Sons, Inc., I963), pp. 87-89.

75

developed and its affect on the post-high school plans of
those students who would have received less desirable aid

packages was determined by means of an informal interview.

CHAPTER IV

ANALYSIS OF RESULTS

The hypotheses relative to the equality of means
were tested by use of simple one-way analysis of variance
procedures. The .05 level of significance was preselected
as the criterion for rejecting the hypotheses. Whenever a
significant difference was found, the Tukey(a) procedure
was used to determine the means between which a signifi-
cance existed. The difference between two multiple cor-

relation coefficients was also tested at the .05 level.

Hypotheses

Hypothesis 1(a)

 

Hypothesis 1(a) states that no significant differ-
ence exists among the relative aid awards of the five
groups. Table 4.1 presents the summary relative to the
testing.of this hypothesis. Any F greater than 2.39 would
indicate that a significant difference did exist among the
means. Thus, the null hypothesis was rejected. The
Tukey(a) procedure was applied to calculate the critical

value for determining between which pairs of means a

76

77

TABLE 4.l.--Analysis of variance summary for testing
difference among means of the groups with respect to
relative aid.

 

 

 

Source SS df MS F
Between Groups 7622502.01 4 l905625.50 17.55
Within Groups l79l3194.03 165 108564.83

Totals 25535696.04 169

 

significant difference did exist. The critical value was
found to be $218.13. Table 4.2 illustrates the difference
between each pair of means and denotes which are greater
than the critical value.

TABLE 4.2.--Difference between mean relative aid awards of
the five groups.

 

 

 

Mean Difference Between Groups
Group Relative _
Aid Award II III IV V
I +$115.00 $226.00* $278.00* $485.00* $609.00*
II -$lll.00 $52.00 $259.00* $383.00*
III -$163.00 $207.00 $331.00*
IV -$370.00 $124.00

 

*Significant at the .05 level.

78

Hypothesis 1(b)

 

Hypothesis 1(b) states that no significant differ-
ence exists among the mean proportion of gift aid in the
awards of the five groups. Table 4.3 presents the summary
relative to the testing of this hypothesis.

TABLE 4.3.--Analysis of variance summary for testing

difference among means of the groups with respect to the
prOportion of award which was gift aid.

 

 

 

Source SS df MS F
Between Groups 41368.30 4 10342.08 5.85
Within Groups 161326.20 165 977.74

Totals 202694.50 169

 

Any F greater than 2.39 would indicate that a sig-
nificant difference did exist among the means. Thus,
the null hypothesis was rejected. The Tukey(a) procedure
was applied to calculate the critical value for determining
between which pairs of means a significant difference did
exist. The critical value was found to be 20.7. Table 4.4
illustrates the difference between each pair of means and

denotes which are greater than the critical value.

79

TABLE 4.4.--Difference between mean proportion Of gift aid
in the awards of the five groups.

 

 

 

Mean Proportion Difference Between Groups
Group of Gift Aid in

Award Package II III IV V
I 59.7 41.4* 32.6* 30.2* 22.3*
II 18.3 8.8 11.2 19.1
III 27.1 2.4 10.3
IV 29.5 7.9

V 37.4

 

*Significant at the .05 level.

Hypothesis 1(c)

 

Hypothesis 1(c) states that no significant differ-
ence exists among the mean high school grade point aver-
ages of the five groups. Table 4.5 presents the summary
relative to the testing of this hypothesis.

TABLE 4.5.--Analysis of variance summary for testing

difference among means of groups with respect to the high
school grade point averages.

 

 

Source SS df MS F
Between Groups 4.09277 4 1.02319 3.869
Within Groups 43.63558 165 .26445

Totals 47.72835 169

 

80

Any F greater than 2.39 would indicate that a
significant difference did exist among the means. Thus,
the null hypothesis was rejected. The Tukey(a) procedure
was applied to calculate the critical value for determin-
ing between which pairs of means a significant difference
did exist. The critical value was found to be .340.
Table 4.6 illustrates the difference between each pair of
means and denotes which are greater than the critical
value.

TABLE 4.6.--Difference between mean high school grade point
averages of the five groups.

 

Difference Between Groups

 

 

Mean
Group G‘P'A' II III IV v
I 3.491 .177 .323 .348* .445*
II 3.314 .146 .171 .268
III 3.168 .025 .122
Iv 3.143 .097
V 3.046

 

*Significant at the .05 level.

Hypothesis 2(b)

 

Hypothesis 2(b) states that no significant differ-
ence exists among the high school class ranks of the five
groups. Table 4.7 presents the summary relative to the

testing of this hypothesis.

81

TABLE 4.7.--Analysis of variance summary for testing
difference among means of groups with respect to the high
school class rank.

 

 

 

Source SS df MS F
Between Groups 5034.81348 4 1258.70337 3.66
Within Groups 56754.44442 165 343.966

Totals 61789.25790 169

 

Any F greater than 2.39 would indicate that a
significant difference did exist among the means. Thus,
the null hypothesis was rejected. The Tukey(a) procedure
was applied to calculate the critical value for determin-
ing between which pairs of means a significant difference
did exist. The critical value was found to be 13.2
Table 4.8 illustrates the difference between each pair of
means and denotes which are greater than the critical value.

TABLE 4.8.--Difference between mean high school class rank
of the five groups.

 

Difference Between Groups

 

 

Gr°up Claggagank II III IV v
I 88.5 3.4 9.0 11.8 14.8*
II 85.1 5.6 8.4 11.4
III 79.1 2.4 5.8
IV 76.7 3.0
v 73.7

 

*Significant at the .05 level.

82

Hypothesis 2(c)

 

Hypothesis 2(c) states that no significant differ-
ence exists among the mean ACT composite scores of the five
groups. Table 4.9 presents the summary relative to the
testing of this hypothesis.

TABLE 4.9.--Analysis of variance summary for testing

difference among means of groups with respect to the ACT
composite scores.

 

 

Source SS df MS F
Between Groups 218.53 4 54.63 3.98
Within Groups 2266.69 165

Totals 2485.22 169

 

Any F greater than 2.39 would indicate that a
significant difference did exist among the means. Thus,
the null hypothesis was rejected. The Tukey(a) procedure
was applied to calculate the critical value for determin-
ing between which pairs of means a significant difference
did exist. The critical value was found to be 2.45.
Table 4.10 illustrates the difference between each pair
of means and denotes which are greater than the critical

value.

83

TABLE 4.10.--Difference between mean ACT composite scores
of the five groups.

 

 

 

Mean Difference Between Groups
Group Composite
Score II III IV V
I 27.26 1.94 2.61* 2.85* 3.17*
II 25.32 .67 .91 1.23
III 24.65 .24 .56
IV 24.41 .32
V 24.09

 

*Significant at the .05 level.

Hypothesis 2(d)

Hypothesis 2(d) states that no significant differ-
ence exists among the means of the expected first semester
grade point averages Of the five groups. Table 4.11 pre-
sents the summary relative to the testing of this hypothe-
sis.

TABLE 4.ll.--Analysis of variance summary for testing

difference among means of groups with respect to the ex-
pected first semester grade point averages.

 

Source SS df MS F

 

Between Groups 3.15798 4 0.78949 4.88
Within Groups 26.98927 165 0.1636

Totals 30.14725 169

 

84

Any F greater than 2.39 would indicate that a
significant difference did exist among the means. Thus,
the null hypothesis was rejected. The Tukey(a) procedure
was applied to calculate the critical value for determin-
ing between which pairs of means a significant difference
did exist. The critical value was found to be .267.
Table 4.12 illustrates the difference between each pair
of means and denotes which are greater than the critical
value.

TABLE 4.12.--Difference between expected first semester
grade point averages of the five groups.

 

 

 

Mean Difference Between Groups
Group Expected
G.P.A. II III IV V
I 3.051 .172 .287* .320* .388*
II 2.879 .115 .148 .216
III 2.764 .033 .101
IV 2.731 .068
V 2.663

 

*Significant at the .05 level.

Hypothesis 2(e)

 

Hypothesis 2(e) states that no significant differ-
ence exists among the means of the actual first semester
grade point averages of the five groups. Table 4.13 pre-
sents the summary relative to the testing of this

hypothesis.

85

TABLE 4.13.--Analysis of variance summary for testing
difference among means of groups with respect to the actual
first semester grade point averages.

 

 

Source SS df MS F
Between Groups 3.68143 4 0.92035 2.074
Within Groups 73.21790 165 0.44375

Totals 76.89933 169

 

Table 4.14 illustrates the difference between each
pair of means. An analysis of this table revealed a rather
sizeable difference between Groups V and I. Therefore,
the Tukey(a) procedure was applied and a critical value of
.441 was computed. Since the difference between Groups I
and V exceeded this value, a significant difference was
found. Consequently, the F statistic and the q statistic
led to conflicting decisions. A similar situation was
demonstrated by Winer in which he indicated that the con-
flict was caused by the equality of several means.1 Since
the means of Groups II, III, and IV fall at nearly the
same point, it appears that these means could be the reason

for the conflict between the two statistics.

 

1Winer, Statistical Principles in Experimental
Design, pp. 78-79:

86

TABLE 4.14.--Difference between actual first semester grade
point averages of the five groups.

 

 

 

Mean Differences Between Groups
Group Actual
G.P.A. II III IV V
I 3.068 0.250 0.313 0.233 0.454*
II 2.818 0.063 0.017 0.214
III 2.755 0.080 0.141
IV 2.835 0.221
V 2.614

 

*Significant at .05 level.
Exploratorygpestions

Use of Student's Work Status to
Predict First Semester Grades

 

 

The difference between two multiple correlation
coefficients was tested at the .01 level to determine

whether there was significant difference between them.

Hypothesis 3.--Hypothesis 3 states that the vari-
able of work status when added to the three variables of
high school grade point average, high school class rank,
and ACT composite score would significantly increase the
precision of the prediction of first semester grade point
averages. The multiple correlation coefficient for the
prediction of first semester grade point averages was
0.6244 when the three variables of ACT composite score,

high school grade point average, and high school class

87

rank were used. When the student's work status was added
to make a fourth variable in the prediction equation, the
multiple correlation became 0.6326. This represented an
increase of only 0.0082. Table 4.15 presents the summary
relative to the testing of this hypothesis.

TABLE 4.15.--Analysis of variance summary for testing
difference between two multiple correlation coefficients.

 

 

Source df SS MS F
4 variable regression 4 30.933 2.75*
3 variable regression 3 30.154

Gain due to addition
of work status 1 .799 .799

4 variable residuals 165 46.752 .283

 

Since an F of 6.63 or greater is required in order
to have a significant difference between the two multiple
correlation coefficients, the positive hypothesis was re-
jected.

Im act of Proposed Financial
Aid Policy

 

Table 4.16 illustrates the amount of financial
assistance which some students would have lost had the
hypothetical packaging policy been in effect for the
1969-1970 academic year.

Two groups of students were of particular interest

because it seemed they would be the most likely not to

88

 

 

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noon ussoad

 

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poms Hams» on Ooumeu no can no mussofim Ommwoomm mammoa mucmpsum mo HOQESZII.OH.¢ wands

89

have enrolled at the University of South Dakota had the
prOposed packaging policy been used to determine their
award. One group was composed of those students who would
not have received an award because they could demonstrate
no need. The second group was composed of those students
who would still have received an award but the amount
would have been reduced by $300.00 or more. In order to
insure that these students were adequately represented in
the sample, a disproportionate stratified sample was drawn.
The strata, the number of students in each strata, and the
sampling fraction is illustrated by Table 4.17.

TABLE 4.17.--Selected strata for the students losing finan-
cial assistance by application of hypothetical packaging

 

 

policy.
No. in Sampling
Strata No. Sample Fraction
1. Students who would re-
ceive no award 15 10 2/3

2. Students losing $300.00

or more 9 6 2/3
3. Students losing less
than $300.00 85 17 1(5
Total 109 33 3/10

 

The reaction of the students to the question per-
taining to how their plans might have changed had the Uni-
versity of South Dakota provided them no financial

assistance was as follows:

90
23 indicated that they still would have enrolled
at the University of South Dakota.

5 indicated that they were uncertain as to what
they would have done.

4 indicated that they would have attended another
institution.

The nine students who comprised the total number of stu-
dents who were either uncertain or would have attended
another institution were then asked to react to the hy-
pothetical award. All five of the students who were un-
certain and two of the four that would have attended
another school indicated that they would have accepted
the hypothetical award. Consequently, thirty-one of the
thirty-three students comprising the sample would have
attended the University of South Dakota even though they
would have received an award which at best would have been
comparable to that which the proposed packaging policy
would have provided for them. Of the two students that
would not have enrolled, one came from the stratum which
would have received no award and one came from the stratum
that would have lost less than $300.00 in financial
assistance.

Since a disproportionate sampling fraction had
been used, this factor had to be considered prior to the
drawing of an inference relative to the percentage of the
109 students that would not have attended the University
of South Dakota had they received an award as determined

by the prOposed packaging policy. Taking this factor into

91

consideration, it was inferred that approximately 6 per
cent of the 109 students losing some financial assistance
would not have attended the University of South Dakota.
Tables 4.18 and 4.19 provide some subordinate
information relative to the contemplated college plans Of
the students in the sample. The data contained in these
tables indicate that nearly 70 per cent of the students in
the sample had applied for admission at the University of

South Dakota only.

Summary

The 170 students involved in this study were
ordered according to their financial need as determined
by the analysis of their Parents' Confidential Statement
by College Scholarship Service. The ordered list was then
divided into five groups with Group I being composed of
the thirty-four students with the least need and Group V
being composed of the thirty-four students with the most
need. Means for each group were computed with respect to
the following:

1. Relative aid
. Proportion of gift aid in the award

High school class rank

High school grade point average

ACT composite score

Predicted first semester grade point average

\l m U1 k U N
O

. Actual first semester grade point average

92

TABLE 4.18.--Number of students completing requirements for
admission at other colleges and universities in addition to
the University of South Dakota.

 

 

Number
Institution of
Students
Only at University of South Dakota 23
At University of South Dakota and:
Buena Vista College 1
Concordia College 1
Dakota Wesleyan University 1
Morningside College 1
Northern State College 2
University of Iowa 1
University of Michigan 1*
At University of South Dakota and
two other schools:
Augustana College and
South Dakota State University 1
St. Olaf College and
Concordia College _1_
Total 33

 

*Only student to be rejected by some other insti-
tution.

93

TABLE 4.19.--Comparison of awards in respect to the amount
of educational expenses which the student was expected to
assume.

 

How Award Compared
to USD Award

 

 

Total
Not As
Good Same Better

Augustana College 1 l 2
Concordia College 1 l
Dakota Wesleyan

University 1 1
Huron College 1 l
Morningside

College 1 1
Northern State _

College 2 2
South Dakota State

University __ _l __ _1

Totals 3 4 2 9

 

94

Upon testing related means for equality, it was
found that the five groups of students involved in this
study were treated significantly differently with respect
to the manner in which their financial need was fulfilled
and with regard to the proportion of their award which was
gift aid. It was also found that a significant difference
existed among the groups with respect to their mean high
school grade point average, mean high school class rank,
mean ACT composite score, mean expected first semester
grade point average, and the mean first semester grade
average.

Exploratory questions included in this study
develOped two further investigations. It was found that
if the student's work status was added as a variable to
the regression equation using the high school grade point
average, high school class rank, and ACT composite score,
that no significant increase in the precision of predict-
ing first semester grades would result. Information ob-
tained by interviewing a disproportionate stratified sample
of students led to the inference that approximately 6 per
cent of the 109 students who would have received less de-

sirable packages would have enrolled at some other insti-

tution.

CHAPTER V

SUMMARY AND CONCLUSIONS

Summary
The technological threat which Sputnik created and

the desire to expand the equality of educational oppor-
tunity stimulated explosive growth in student financial

aid programs in recent years. Funds were solicited from

a great variety of local, state, and national sources for
the proclaimed purpose of making it possible for students
who, without such financial assistance, would not be able
to attend college. The analysis of several extensive re-
search projects, however, seemed to indicate that the funds
were not always being used for the purpose for which they
were solicited. It was apparent that a social class bias
had influenced the manner in which financial assistance was
being awarded. Students from the higher social economic
levels were being favored with respect to the manner that
their need was fulfilled in both the amount of aid and the
proportion of their award which was gift aid. The most
current analysis of financial aid programs reported in a
review of pertinent literature indicated that a value

system, which provided a disprOportionate amount of

95

96

gift-aid for middle- and upper-income students and self-
‘help aid for low-income youngsters, was still functioning
in the financial aid programs of many colleges and uni-
versities. It has been suggested that the Higher Education
Act of 1965, which created the Economic Opportunity Grants
Program, was a result of the recognition that colleges and
universities would not independently change their value
system. Some observers felt that the Economic Opportunity
Grants Program had the possibility of mitigating the bias
in the financial aid systems since it was designed for stu-
dents of exceptional need. A review of the literature,
however, did not reveal any analysis of financial aid pro-
grams since the Economic Opportunity Grants Program has
been in effect. Therefore, it was the purpose of this
study to analyze the awards of one university to determine
if a bias still existed in their award system even though
they participated in the Economic Opportunity Grants Pro-

gram.

Findings
The study was initiated by identifying all first
semester freshmen students at the University of South
Dakota who were awarded financial assistance from un-
restricted funds. The population, which involved 170
students, was ordered according to need and then divided
into five groups with Group I being identified as the

group with the least need and Group V as the group with

97

the greatest need. Means for seven different types of data
were computed for each of the five groups and the related
means were tested for equality. Significant differences
existed among the groups with respect to the following:
1. Relative aid awards
2. Proportion of award which was gift aid
3. High school grade point average
4. ACT composite score
5. High school class rank
6. Expected first semester grade point average
7. Actual first semester grade point average
Two exploratory questions produced the following
information:
1. The addition of the student's work status as
a variable to the regression equation which
included the high school grade point average,
high school class rank, and ACT composite
score did not significantly increase the
precision of the prediction of the first
semester grade point average.
2. Approximately 6 per cent of the students, who
would have received a less desirable aid

package, would not have enrolled.

98

Conclusions

 

Analysis of Current

Packaging Policy
The analysis of the data clearly indicated that a

 

 

bias did exist with respect to the manner which a stu-
dent's need was fulfilled. The bias was of such a nature
that the mean relative aid award and the mean prOportion
of gift aid in the awards of Group I were significantly
different from their related means of Groups II, III, IV,
and V. Table 5.1 illustrates the perfect correlation that
the mean need and the mean relative aid award have with
the mean high school grade point average, the mean high
school class rank, and the mean ACT composite score of

the five groups. This supports the theory that there is

a strong relationship between the student's social economic
class and his success in school and on standardized tests.
Thus, if a student's academic profile is a significant
factor in determining how much of his need is to be ful-
filled, the students with the least need will tend to have
their need fulfilled to a greater degree.

Further analysis of the data revealed that the
institution's participation in the Economic Opportunity
Grants Program reflected itself in the gift aid awards
rather than in the relative aid awards. For example,
Group II received the lowest proportion of gift aid in
their award for several apparent reasons. First, the need

analysis of their Parents Confidential Statement was such

99

 

 

 

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100

that very few individuals in this group were qualified to
be considered for Economic Opportunity Grants. The second
reason appeared to be that their academic credentials were
such that very few qualified for scholarship assistance
under current policy. Therefore, the major proportion of
the awards which this group received was in the form of

self-help.

Impact of the Proposed
Packaging Policy

One readily apparent feature of the prOposed

 

packaging plan was a reduction in the maximum amount of
self-help which some students had to assume. For example,
under the actual system, some students assumed job and
loan obligations for as much as $1,300.00. Under the pro-
posed plan no student would have to assume a burden of
self-help greater than $715.00. Therefore, burden for
self-help was distributed over the entire group rather
than concentrated in the groups with the less pretentious
academic credentials.

Results from the investigation conducted relative
to the impact that the proposed packaging policy would
have had on the total freshmen enrollment seemed to indi-
cate that it would have been negligible. In fact, it is
possible that the enrollment could have been increased
due to a more effective utilization of the available self-
help aid. During the interview sessions, many students

indicated that their parents probably would have provided

101

them additional resources rather than have them accept
employment or a loan. Consequently, the aid awards which
were not accepted could then be extended to those appli-
cants who failed to receive awards because of insufficient
funds.

The requirement that each student must accept a
specific amount of self-help prior to being eligible for
gift aid can relieve some of the concern for those finan-
cial aid officers who question the validity of the current
financial need assessment techniques. If a student is
willing to assume the obligations that a self-help award
requires, it perhaps is some indication that his need is
fairly realistic. Therefore, the self-help requirement
can function as one more screening device in the need
assessment process.

The changes which the packaging process might incur
in the academic profile of the group being awarded assist-
ance is much more difficult to assess. The number of stu-
dents who would not have enrolled, however, is such that
it is highly unlikely that the overall mean profile of
the group being assisted would be significantly changed
even if the most promising individuals were lost. Insti-
tutions, that have used financial assistance to recruit
students with special talents or exceptional academic
records with the conviction that they enhance the student
body, may question the value of the prOposed packaging

policy. The proposed packaging policy, however, was not

102

created for the purpose of using financial assistance to
recruit students without consideration for their ability
to pay for their education. Instead, the prOposed packag-
ing policy was designed to expend available resources in

a fair and equitable manner.

Impact of Part-Time

Employment
The fact that part-time employment during the term

 

had no apparent association with the student's first
semester grade point average was not surprising since it
was consistent with the findings reported by related re-
search projects. The findings should be reassuring to
those individuals who have some concern about the possible

effect of employment on the student's academic performance.

Recommendations and Implications for

Further Research

One dimension of the award system which needs

 

further investigation is the amount of money which a stu-
dent should be expected to contribute to his own education.
A fundamental investigation should be directed toward dis-
covering if there is a relationship between the student's
social economic level and the resources which he can be
expected to provide. If students are to be encouraged to
work and save money for their education, they should not
forfeit financial assistance to the student who has lacked
the ambition or the economic foresight to save for his

own education. At the same time, however, students who

103

must contribute to the support of their family should not
be penalized for not being able to contribute to their
educational expenses. Therefore, this particular aspect

of the award system should be studied so that the financial
aid officer has some rationale for the part he expects
student resources to have in the packaging process.

As the cost of attending college continues to
spiral, there is a growing recognition that a lack of re-
sources is a serious deterrent to college attendance. The
public's recognition of this fact, and also the recognition
of the importance to the society of having as many able
young peOple in college as possible, is reflected in the
growing support which colleges have been receiving in the
form of new funds for scholarships, loans, and jobs.
Financial assistance for college students has come from
individual donors, corporations, foundations, State and
Federal Governments. If this support is to be maintained
and new sources developed, it is essential that insti-
tutions can present verifiable evidence of the accomplish-
ments of their financial aid programs. In order to do
this, the financial aid program must have some identifiable
criteria against which it can be compared. Therefore, it
is essential that objectives are established for the finan-
cial aid program which relate to the various goals and
practices of the institution. Since all members of the
academic community have a vested interest in the results

of the financial aid program, the objectives should be the

104

result of a joint effort by representatives from the stu-
dent body, the faculty, and the administration.

Once the financial aid program has been given a
sense of direction by the objectives which have been
established for it, parameters should be established which
will provide consistency among the awards made to students
with respect to the amount and the burden for self-help
which each person is expected to assume. The results of
this study clearly indicated the need for specific criteria
to guide the packaging process. The criteria need not be
so inflexible that the financial aid officer cannot make
exceptions. The criteria, however, should be such that
students with similar circumstances would receive awards
which are essentially the same.

The minimum research plan which an institution
should consider ought to include several investigations.

It should definitely undertake the necessary procedures
needed to appraise the past, present, and the potential
contributions which the financial aid program has or can
make to the various goals and practices of the institution.
Further, if a school subscribes to the philosophy that the
primary purpose of a college's financial aid program is to
provide financial assistance to students who, without

such assistance, would be unable to attend the institution,
then one aspect of the basic research plan should certainly
be to determine how effectively the available resources

are being used to fulfill this purpose. Since the equitable

105

treatment of all students should also be a major concern,
another essential feature of the basic research plan should
be to determine the consistency with which financial aid

is packaged. Once answers are obtained to the major
pertinent questions relative to effectiveness and equality,
more comprehensive research can be initiated. Research
plans, however, can be executed only when the financial aid
officer has the essential resources. Therefore, the central
administration of the institution must assume the responsi-
bility for providing the means with which to conduct re-
search. If this responsibility is not met, it is very
probable that the institution's financial aid program will
be administered by intuitive decisions rather than docu-

mented information.

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