In this scramble selectivity is "the coin of the realm," as one admissions officer put it to The Atlantic last year. More and more schools define themselves as "selective" in an effort to boost their position and prestige, and fewer and fewer offer the kind of admissions process that provides real opportunities for poorer students. As a result, those disadvantaged students who do attend college are less and less likely to find themselves at four-year schools. Among students who receive Pell Grants—the chief need-based form of federal assistance—the share attending four-year colleges fell from 62 percent in 1974 to 45 percent in 2002; the share attending two-year schools rose from 38 percent to 55 percent.
The advantage to well-off students is particularly pronounced at private colleges and universities. Over the course of the 1990s, for instance, the average private-school grant to students from the top income quartile grew from $1,920 to $3,510, whereas the average grant to students from the lowest income quartile grew from $2,890 to $3,460. And for all the worry of the middle class over rising tuition, increases in grant dollars often outstrip increases in tuition costs for middle- and upper-income students—but not for their poorer peers. In the second half of the 1990s, a study by the Lumina Foundation (a higher-education nonprofit) found, families with incomes below $40,000 received less than seventy cents in grants for every dollar increase in private-college tuition. All other families, including the richest, received more than a dollar in aid for every dollar increase in tuition.
It isn't just schools that have moved their aid dollars up the income ladder. State and federal governments have done the same. Since the 1980s public funds have covered a shrinking share of college costs, and with entitlements claiming an ever growing chunk of state and federal budgets, the chance of a return to the free-spending 1970s seems remote. But even when higher-education outlays have increased—they did during the 1990s boom years, for instance—government dollars have been funneled to programs that disproportionately benefit middle- and upper-income college students.
Both colleges and states have increasingly invested in "merit-based" scholarships, which offer extra cash to high-performing students regardless of need; these programs are often modeled on Georgia's HOPE scholarship, established in 1993 and funded by a state lottery, and thus amount to a form of regressive taxation. The federal government, meanwhile, has used tax credits to help parents defray the cost of college—a benefit that offers little to low-income families. Pell Grants have been expanded, but the purchasing power of individual grants hasn't kept pace with rising tuition.
Overall, American financial aid has gradually moved from a grant-based to a loan-based system. In 1980, 41 percent of all financial-aid dollars were in the form of loans; today 59 percent are. In the early 1990s Congress created a now enormous "no-need" loan program; it has been a boon for upper-income students, who can more easily afford to repay debts accrued during college. At the same time, the federal government allowed families to discount home equity when assessing their financial circumstances, making many more students eligible for loans that had previously been reserved for the poorest applicants. The burdens associated with loans may be part of the reason why only 41 percent of low-income students who enter four-year colleges graduate within five years, compared with 66 percent of high-income students.
All these policy changes have been politically popular, supported by Democratic and Republican politicians alike. After all, the current financial-aid system is good for those voters—middle-class and above—who already expect to send their kids to college, and who are more likely to take the cost of college into consideration when they vote. And though Americans support the ideal of universal educational opportunity, they also support the somewhat nebulous notion of merit and the idea that a high SAT score or good grades should be rewarded with tuition discounts—especially when it's their children's grades and SAT scores that are being rewarded.
But it's not enough to blame the self-interest of many universities or the pandering of politicians for the lack of socioeconomic diversity in higher education. There's also the uncomfortable fact that a society in which education is so unevenly distributed may represent less a failure of meritocracy than its logical endpoint.
That the meritocracy would become hereditary was the fear of Michael Young, the British civil servant who coined the term. His novel The Rise of the Meritocracy (1958)—written in the form of a dry Ph.D. thesis that analyzed society from the vantage point of 2034—envisions a future of ever more perfect intelligence tests and educational segregation, in which a cognitive elite holds sway until the less intelligent masses rise to overthrow their brainy masters. A scenario of stratification by intelligence was raised again in 1971, in these pages, by the Harvard psychologist Richard Herrnstein, and in 1994 by Herrnstein and Charles Murray, in their controversial best seller The Bell Curve. That book is now remembered for suggesting the existence of ineradicable racial differences in IQ, but its larger argument was that America is segregated according to cognitive ability—and there's nothing we can do about it.
Today Young's dystopian fears and The Bell Curve's self-consciously hardheaded realism seem simplistic; both reduce the complex questions of merit and success to a matter of IQ, easily tested and easily graphed. The role that inherited intelligence plays in personal success remains muddy and controversial, but most scholars reject the "Herrnstein Nightmare" (as the journalist Mickey Kaus dubbed it) of class division by IQ.