Has UMass used financial aid packages to favor out-of-state students?

A recent Pioneer Institute report concluded that the University of Massachusetts at Amherst has more stringent admissions standards for Bay State students than it does for out-of-state students. Given that UMass is heavily funded by state residents’ tax dollars, some experts have questioned whether UMass is favoring out-of-state students and their tuition revenue rather than serving the broader interests of the Commonwealth. Despite the scrutiny over admissions, UMass has the ability to tip the scales towards out-of-state students in another way: merit-based financial aid.

 

UMass students have access to both state and UMass institutional programs for financial aid, both of which ultimately are funded partly by taxpayers. UMass may claim that state funding doesn’t directly contribute to financial aid awarded to out-of-state students, but in reality that grant money constitutes foregone tuition revenue, and the state subsidizes UMass for virtually all of its operating losses, totaling $720 million in fiscal year 2017.

 

The number and value of financial aid awards given to in-state and out-of-state students are portrayed in Table 1. The data comes from a financial aid factbook and admissions profile data, both published by UMass Amherst.

 

Table 1:

Comparison of financial aid packages given to students entering UMass Amherst by place of permanent residency, fiscal year 2017

Place of permanent residency	Award type	Number of entering students	Number of students receiving awards	Percent of students receiving awards	Average amount awarded	Total value of non-need-based awards*
Massachusetts	Non-need-based	3,418	2,166	63.4%	$2,509	$8,575,762
Out-of-state	Non-need-based	1,225	1,021	83.3%	$10,267	$12,577,075
Massachusetts	Need-based	3,418	1,456	42.6%	$7,109	$10,350,704
Out-of-state	Need-based	1,225	193	15.8%	$2,374	$458,182

*The source of funding was listed in UMass Amherst’s report as coming from “institutional” sources, as distinct from state, out-of-state, federal, or private programs, and are expressed before loans are taken into account

 

While non-need-based aid is awarded to out-of-state students in larger proportions than in-state students, out-of-state students pay more for their education overall. The before-aid “sticker price” for tuition and fees at Umass Amherst was $16,824 more for out-of-state students during the 2016-17 academic year. This difference probably constitutes the biggest reason UMass aims to increase out-of-state enrollment. However, after financial aid is accounted for, out-of-state students end up paying an average of $8,064 less than the sticker price. Table 2 portrays these figures, with estimates for before-aid tuition provided by UMass Amherst.

 

Table 2:

Tuition and fees paid by incoming freshman at UMass Amherst before and after merit-based aid, 2017

	In-state students**	Out-of-state students**	Difference between in-state and out-of-state price
Average before-aid tuition & fees ($)	14,596	31,420	16,824
Average after-aid tuition & fees ($)	13,025	23,356	10,331

**Includes students who do not receive financial aid

 

In 2016, the University set aside $22 million in “merit money” to award to accomplished non-residents as a recruitment tool. UMass is not alone in making large investments to attract high-paying out-of-state students, either: at least 10 public universities in the United States give merit-based aid to over two-thirds of out-of-state students.

 

Still, UMass’s policy of granting more generous non-need-based financial aid packages to out-of-state students is only one wrench in its toolkit. UMass has facilitated efforts to increase revenue by maintaining less stringent admissions standards for out-of-state students. Such policies raise concerns of fairness for Massachusetts residents wishing to attend the state’s flagship public university campus.  

 

You can read more about the University of Massachusetts’ problematic admissions practices in Pioneer Institute’s economic opportunity archive.

 

Andrew Mikula is the Roger Perry Government Transparency intern at Pioneer Institute. He studies economics at Bates College.