STORRS, Conn. — Spencer Mulligan knew his family could pay for his college education, even without loans or grants. So when the University of Connecticut offered a merit award of $20,000 over four years, he saw it as a bonus.
As a discount on in-state tuition, it brought the cost well below half of what his family might have paid at his other top choices, Penn State or the University of Vermont.
“My dad was kind of split because he didn’t want to push me into going to a school because of financial reasons,” said Mulligan, a 21-year-old computer science student from Darien, one of the nation’s wealthiest communities. “Without financial reasons I might have gone to Penn State, but on the other hand he was like, ‘If you go to UConn, it will save us a bunch of money.’
“That means now I can pressure him into getting me stuff,” he joked.
Financial aid, traditionally a lifeline for poorer students at public colleges, is increasingly being used to attract students from more affluent families. In competition with private schools and other public institutions, the state schools are using the money to lure the most qualified students, raise average test scores and entice students from high-income families who can pay the rest of the full sticker price.
Critics say that by devoting aid to students who don’t need it, state schools are punishing the poor, making it harder for them to attend college when the gap between tuition costs and affordability is only growing.
“The reality is that for poor families, it’s a question of whether the kids go to college at all. For the better-off family, it’s a question of which college,” said Harold Levy, director of the Jack Kent Cooke Foundation, which provides need-based scholarships. “It’s a tragic waste of talent. It alters the lives of students.”
Of the institutional aid given last year to UConn freshmen, the amount not based on need rose to $19.9 million, up from $12.9 million five years earlier. But the school also increased the amount of need-based aid it offered, $50.9 million, up from $38.9 million five years earlier.
Other state schools have moved resources even more aggressively to merit aid. A review this year by Stephen Burd, an analyst with the think tank New America, found 28 percent of public colleges in 2014-2015 spent at least half of their aid dollars on students without financial need.
It’s a shift that has helped state universities cope with declines in state funding for higher education; the awards bring in students whose families can pay close to full tuition.
At UConn, as at many other flagship state schools, out-of-state students have benefited most from the increase in merit aid, according to a 2014 legislative report. The school costs $25,802 annually for residents and $47,344 for those out of state.
State universities are adopting an approach long used by private schools, according to Joni Finney, an author of a report on college affordability from the University of Pennsylvania’s Institute for Research on Higher Education this year that found investment in merit aid outpacing need-based aid. It said states’ provision of need-based financial aid barely changed from 1996 to 2012, while state aid for high-income students rose more than 450 percent.
The study found aid for non-needy students also growing faster at private, four-year colleges, where institutional aid for students whose families earn above $125,000 increased from $1,950 to $6,400 over the same period. Aid to students whose families make less than $25,000 rose from $2,900 to $7,700.
At UConn, which has been climbing U.S News & World Report rankings, officials have vigorously defended merit awards when pressed by state lawmakers on questions about affordability. Scholarships offered to top students, university officials have said in testimony to the legislature, are critical to the university’s success and attract students who could otherwise attend Ivy League schools.
A 2014 report by a state legislative committee found that aid packages for low-income students have relied increasingly on federal education loans. But it said reducing merit aid to students without financial need, in the absence of other flagship state schools doing the same, would likely hurt UConn’s efforts to move up in rankings, and possibly academic quality.
Meanwhile, winning admission and paying for college has become ever more daunting at flagship state universities, institutions that traditionally were seen by many as affordable fallback options.
Jeslyn Lamonte, 19, of Vernon, Connecticut, is planning to transfer to UConn next year after two years of smaller payments at Manchester Community College, which is 15 miles west of the main UConn campus in Storrs and charges about $4,000 annually.
“It came down to that I didn’t want all the student loans,” Lamonte said.
A classmate, Kim Eigner, 22, of Columbia, Connecticut, transferred to the community college from UConn after her family found the tuition payments overwhelming. Her job at a grocery store’s floral department hardly put a dent in the bills.
“I wasn’t able to afford it myself,” she said.