Scholarships Go Disproportionately To White Students

Via Kay Steiger and Jorge Rivas a study (PDF) shows that 75 percent of college scholarships go to non-hispanic white students even though such students are only 62 percent of the overall student population:

The issue here isn’t racial discrimination, it’s a symptom of the fact that the incentive structure of American higher education is totally screwy. Schools want to produce two things. One is rich alumni who give them money, and the other is high ratings from US News and World Report. Both goals can be pursued either by investing resources in recruiting better inputs or else by investing resources in doing a better job of teaching. It turns out to be more cost-effective to invest in recruiting better inputs. And since high school seniors from high socioeconomic status families tend to already be better-prepared for college than kids from low-socioeconomic status families, that means that financial aid resources naturally flow to the high-socioeconomic status students.

It’s not just race and it’s not just scholarships. Across the board, the way higher education works in America is to deliver the most resources to the people who need the least help.