The Effects of Institutional Aid on The College Affordability Index and Student Body Diversity

Tuition for higher education continues to increase substantially, causing colleges to be less affordable for many traditional college students and their families. To make higher education more affordable, higher education administrators provide students with institutional aid. Such aid is awarded to students based on merit or need, and the way it is awarded may affect an institution\u27s affordability and student body diversity. The purpose of this study is to determine the effects of institutional aid on the rate of tuition increase and the diversity of the student body at colleges and universities. This study was further designed to determine if information about the relationships among institutional aid, the rate of tuition increase, and student body diversity could provide administrators with information and guidance when determining and implementing policy, and direct future research. Institutions were classified according to Carnegie Foundation for the Advancement of Teaching (CFAT) Classification, and diversity was determined by using the National Center for Education Statistics (NCES) classifications of race and gender. Data for this study were obtained from the Integrated Postsecondary Education Data System (IPEDS) of the NCES. Comparisons to determine the relationships among categories of institutional aid, the College Affordability Index (CAI), and student body diversity at different types of institutions were made using a series of one-way analysis of variance (ANOVA) and paired t-tests. Results revealed that the primary research question was partially answered. Analysis of the data confirmed that as institutional aid increased, the CAI decreased at colleges and universities in the Arts and Sciences (A&S) Carnegie classification. Some colleges and universities in this classification that did not offer graduate programs had a statistically significant lower CAI for academic year (AY) 2003 and A Y 2004; therefore, these institutions increased their tuition at a lower rate. The data further revealed that ethnic and gender diversity did not increase at some colleges and universities in this classification when graduate programs were offered