Crikey today draws my attention to SMH reports of a battle between UNSW and Sydney University proffering merit scholarships. Apparently both institutions already offer $10,000 per year to those who get a UAI of 99.9 or over, and UNSW is now offering $4000 to everyone who comes dux of their school.
When it comes to scholarships, it’s worth remembering that there are two types.
- Merit-based scholarships are given to students with good academic skills. Universities generally do this because they want to buy peer effects. In other words, they’re willing to offer student A a discount because it will improve the quality of the learning process for students B and C.
- Needs-based scholarships are given to students from poor families or minorities. The rationale is generally that students from disadvantaged backgrounds have had a harder time on the road to university. Among minorities, scholarships may create more role models for the next generation.
Australia has lots of merit scholarship, and hardly any need scholarships. By contrast, places like Harvard have lots ofÂ need-based scholarships and hardly any merit-based scholarships. Malcolm Turnbull’s son Alex probably paid full fees, since his dad is reasonably well off. But if your family income is US$40,000 or less, Harvard will give you a free ride. When you hear “scholarship” in Australia, think merit-based. When you hear “scholarship” in the US, think needs-based.
I’m comfortable with Australian universities spending their money on merit scholarships if they want to buy more peer effects, but I’d feel better about it if there was also some money being put on the table for poor kids.