Bloomberg News

NYU Exiting National Merit Scholarship Citing Test Process

November 03, 2011

Oct. 21 (Bloomberg) -- New York University pulled out of the National Merit scholarships, becoming at least the ninth school to stop funding one of the largest U.S. merit-based aid programs, because it doesn’t want to reward students based on a standardized test.

The National Merit Scholarship Corp. distributed more than $50 million to students in the 2009-2010 year based on the PSAT college entry practice exam. Most of the money comes from almost 200 colleges, including Northwestern University and University of Chicago, to fund awards of as much as $8,000 over four years. Companies such as Boeing Co. and Pfizer Inc. also sponsor the program, primarily to benefit their employees’ children.

NYU’s withdrawal is another blow to National Merit, already ignored by many elite colleges and a subject of a critical report by a Harvard College-chaired commission. Schools are debating how to allocate scarce financial-aid dollars as tuition costs rise and the economy remains sluggish. While high schools trumpet National Merit winners, relying heavily on a standardized test is a flawed way to evaluate students, said Shawn Abbott, assistant vice president of admissions at NYU.

“We simply do not feel that enrolling a larger number of National Merit finalists is a necessary way for us to attract the most academically qualified freshman class,” Abbott said in an interview.

NYU stopped funding grants to finalists with the freshman class that started school in September, Abbott said. Students from earlier classes that were named National Merit scholars will continue to receive their annual grants.

Famous Scholars

National Merit was founded in 1955, supported with funding from Carnegie Corp. and the Ford Foundation. Economist Paul Krugman, Amazon.com Inc. Chief Executive Officer Jeff Bezos and Supreme Court Chief Justice John Roberts are past scholars, as is Microsoft Corp. Chairman Bill Gates, whose award was sponsored by Boeing.

Harvard, Yale University and the six other schools in the Ivy League don’t fund National Merit scholarships because they award only need-based aid.

About 3.5 million students, including as many as 1.6 million 11th-graders, took the PSAT last week, qualifying them for consideration in National Merit’s competition. The nonprofit company determines a score cutoff in each state to determine who advances as a semifinalist. Those that qualify must take the SAT exam, submit grades and write an essay to become one of about 15,000 finalists.

University of California

The six campuses of the University of California that previously participated in National Merit scholarships no longer fund the program. The University of Texas at Austin and Wake Forest University have also withdrawn, saying they don’t want to reward aid based on a standardized test.

National Merit is “disappointed” that some finalists who wish to attend these universities won’t have the opportunity to get a scholarship funded by the schools, said Eileen Artemakis, a spokeswoman for the Evanston, Illinois-based organization.

Many colleges including Wake Forest in Winston-Salem, North Carolina, have criticized standardized tests, saying they favor the affluent, hurt minorities and don’t predict college success.

William Fitzsimmons, the admissions dean at Harvard, chaired a National Association for College Admission Counseling commission that in 2008 criticized the National Merit program in a report, saying it was “misusing” the PSAT and should end the practice of using minimum test scores for merit aid eligibility.

Lack of Transparency

“National Merit has never been transparent about, for example, the ethnic diversity of the people who receive National Merit scholarships, nor do we get any information about whether or not this very large amount of money is used by, for example, large numbers of people who have great financial need,” Fitzsimmons said in an interview.

About two-thirds of all full-time students receive some form of aid, according to an October 2010 report by the nonprofit College Board, which owns the PSAT. In the 2010-2011 academic year, tuition and fees for in-state students at public universities climbed 7.9 percent from a year earlier, while they rose 4.5 percent at private, nonprofit colleges, the College Board said.

Colleges contributed $23.6 million to the National Merit program in the 2009-2010 academic year and corporations and foundations gave more than $19 million. The remaining $7.7 million in scholarships were funded by National Merit from interest on its investments, which were valued at $146 million as of May 2010, according to the group’s annual report.

College Board Partnership

“The College Board and the National Merit Scholarship Corp. share a common commitment to promoting excellence and equity in education,” said Peter Kauffmann, a spokesman for New York-based College Board. The PSAT “fits perfectly” with National Merit’s criteria for selecting scholarship finalists,” he said.

National Merit hasn’t collected any fees from the PSAT for the past 14 years, though it is entitled to a “nominal percent” of revenue under their contract, Kauffmann said. Instead, it has reinvested the funds into the program to keep test fees low and expand access to fee waivers, he said.

The College Board gains a marketing benefit from its association with National Merit when school districts or states consider using public funds to pay for the PSAT in 11th grade or ACT Inc.’s 10th-grade test known as PLAN, according to Bob Schaeffer, a spokesman for FairTest, a nonprofit group in Boston that works to end the misuses of standardized testing. Almost 1.3 million 10th-graders nationally took the PLAN test in the 2010-2011 academic year, according to the nonprofit ACT.

PSAT Rationale

Karen Pennell, ACT’s southwest regional manager, said at a 2007 hearing in Austin, Texas, when the state considered paying for a standardized test, that the rationale she heard most often for using the PSAT was that it might boost the number of National Merit scholars in the state.

ACT has approached National Merit from time to time, though the organization hasn’t shown interest in other options, or opened up their contract for competition, said Ed Colby, spokesman for Iowa City, Iowa-based ACT.

The PSAT “has proven to be the most effective, inclusive, and equitable method available for the initial step in a multitiered evaluation” of scholarship candidates, National Merit spokeswoman Artemakis said. High school grades, rank and other “locally determined identifiers,” tend to vary in consistency and reliability, she said.

The University of Texas at Austin, which now gives merit awards based on its own criteria, felt National Merit’s requirements shouldn’t be a driver for distributing aid, said Tom Melecki, director of student financial services at the campus.

Special Recognition

The National Merit program carries a lot of prestige at high schools and colleges across the country, according to guidance counselors.

Semifinalists at Walton High School in Marietta, Georgia, are called to the guidance office the morning their status is announced. They are treated to a special breakfast that day and get their names listed in the school district’s newsletter. The students are told they can refer to this honor for the rest of their lives, said school Principal Judy McNeill.

Meghan Davenport, who graduated in May from Walton, said she was awarded $1,000 a year from Rice University in Houston, as a National Merit finalist.

“To get $4,000 from anywhere is a big deal,” Davenport, 18, said in a telephone interview.

Tuition Waivers

Nonresident student finalists at the University of Oklahoma can earn tuition waivers and cash valued at as much as $92,000, according to the school’s website.

Oklahoma funded 188 scholarships for freshmen in 2009-10, the most for a public university, according to National Merit’s annual report. The winners are introduced at a football game, said LeeAnn Victery, who runs the school’s scholars program.

Still, not everyone who qualifies for a scholarship gets rewarded.

Greg Heon, 18, who graduated in June from Horace Mann, a private school in New York, scored high enough on the PSAT to become a semifinalist. Since he did well on the ACT, he hadn’t planned on taking the SAT, until he read it was required to become a finalist.

Heon said he wanted to become a finalist for the prestige and because he thought it would help him get into his schools of choice. While he qualified, Heon didn’t win any money. When he was accepted early into Stanford University, which doesn’t participate in the National Merit program, Heon said he stopped caring about it.

‘Misguided’ Grandeur

Being a National Merit scholar has no impact on admission decisions at Massachusetts Institute of Technology, said Stuart Schmill, dean of admissions. MIT doesn’t fund the scholarships, nor do some other top schools such as the University of Michigan, University of Virginia and Williams College.

“National Merit has developed a kind of grandeur that is misguided,” said Lawrence Momo, director of college counseling at the private Trinity School and former head of undergraduate admissions at Columbia University, both in New York. “The mythology that has been created about it in the public imagination is overblown.”

The following lists the U.S. colleges that funded the most freshmen National Merit scholars in the 2009-2010 academic year.

Source: National Merit Scholastic Corp.

--With assistance from Alexis Leondis in New York. Editors: Lisa Wolfson, Niamh Ring

To contact the reporter on this story: Janet Lorin in New York jlorin@bloomberg.net.

To contact the editor responsible for this story: Jonathan Kaufman at jkaufman17@bloomberg.net.


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