College Guide


November 16, 2012 3:27 PM How Are Those Merit Scholarships Working Out?

By Daniel Luzer

In the last few years many states, in an effort to keep well educated students from moving out of state and taking their talents elsewhere, enacted state merit scholarships, tuition policies to try and keep the highest achieving students in state for college and in state upon gradation from college. This was designed to restrain the “brain drain” that many states with large rural populations noticed. The smartest kids were leaving to go to college. And they never came back.

How well have these merit scholarships worked? Not so well, it turns out. According to a paper published by the National Bureau of Economic Research by Maria Fitzpatrick of Cornell and Damon Jones of the University of Chicago:

Eligibility for merit aid programs slightly increases the propensity of state natives to live in-state, while also extending enrollment in-state into the late twenties. These patterns notwithstanding, the magnitude of merit aid effects is of an order of magnitude smaller than the population treated, suggesting that nearly all of the spending on these programs is transferred to individuals who do not alter educational or migration behavior.

In other words, merit scholarships requiring students to study in the state where they’re from don’t much change graduates’ migration patterns. They’re pretty much going to live where they want to live, given family commitments and job opportunities, whether state merit scholarships are there or not.

There are a number of reasons cheap college might be a good idea objectively (less debt is probably good for the economy, after all, and allows people to be more creative in their career choices) but it turns out not really to work in the way that policymakers envisioned. It might keep some particularly smart and hard working students in state for college, but it doesn’t do much to fix that brain drain.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer


  • Mikhail on November 17, 2012 11:33 AM:

    This reminds me of the effort, mentioned not so long ago, by some towns to lure smart graduates to them by means of loan-forgiveness plans.

    Neither of these plans are going to work if there aren't jobs for those smart graduates to go to. Ultimately, merit scholarships and loan forgiveness are just ways of giving the people money, so whatever amount of money the place offers has to be enough to make up for the fact that they could get higher earning jobs elsewhere -- and that those higher earning jobs can influence their *later* jobs...