Texas pulls out of merit scholarship program

AUSTIN, Texas — The University of Texas at Austin is pulling out of the National Merit Scholarship Program to focus on needs-based financial assistance.

The 50,000-student university — second only to Harvard University in the number of merit scholars enrolled — said budget pressures were causing it to end its participation in the merit-based program, which awards scholarships to top high school achievers. The university emphasized that it will still honor all existing commitments to National Merit Scholars, including those who entered as freshmen this year.

Colleges nationwide are struggling to meet higher demand for financial aid amid fewer resources from states and their own endowed scholarship funds.

“The financial constraints brought about by the economy on families and the university require the redirection of resources to ensure accessibility to UT Austin by all qualified students, regardless of ability to pay,” the UT Office of Student Financial Services said in a statement released Tuesday.

Starting in the fall semester of 2010, the university will begin redirecting the scholarship money to financial assistance programs designed to help students who have a hard time paying for tuition and fees. UT had 281 National Merit Scholars enroll as freshmen last year, compared with 285 at Harvard, according to figures provided by the university.

UT’s National Merit Scholarship Program, which provides $13,000 to qualifying students over four years, cost the university $4.4 million a year, officials said. Tom Melecki, director of student financial services, said UT would still recruit top academic performers even as it changes the way scholarship money is used to attract them.

“We want high achieving students here at the University of Texas. It really just came down to a budgetary decision about where to best direct our resources,” he said. “We want to make sure for students who are meritorious enough to get here but who may have financial need that we’re able to fill that need.”

Over the last decade, nearly every state has started or expanded politically popular “merit aid” programs that reward students with high SAT scores or GPAs, even those whose families could afford college costs.

But the economic downturn, and the surge in demand for need-based aid, is causing a number of institutions to rethink that trend.

The National Merit Scholarship program is a hybrid, run by a nonprofit and supported by companies and individual universities. Students advance to the semifinal round based on the scores on the PSAT exam, taken by about 1.5 million students each year. About 16,000 are selected as semifinalists, and based on other application materials such as high school grades and essays, 8,200 receive awards.

The initial phase of the selection process has drawn criticism from the National Association for College Admission Counseling, which argues scholarships shouldn’t be awarded on the basis of test scores alone.

A number of state universities, such as the University of Oklahoma and Arizona State, have attempted to boost their student profiles by offering National Merit Scholars generous financial aid packages.

AP Education Writer Justin Pope in Raleigh, N.C., contributed to this report.