UT And The National Merit Scholarships: Does It Really Cost $4.4 Million A Year?

A while back, the University of Texas announced it would no longer be participating in the National Merit Scholarship program, where brainiac students get $13,000 scholarships.

All the stories mentioned that UT said the program cost $4.4 million a year. We had a question about that and e-mailed UT; we never heard back and forgot about it until today. So we called, and eventually got to speak to Thomas Merecki, director of student financial students.

A warning: It was a devilish, F-producing combination of accounting and calculus classes in college that turned us into a largely numbers-free journalist. So our grasp of math, both in the abstract, theoretical sense and the balancing-a-checkbook sense, is tenuous at best.

But here's the question we had: How could this program cost $4.4 million freaking dollars a year?

There's that much bureaucracy involved?

Or, as we thought was more likely, UT is not counting its spending so much as it's counting the tuition money it's not getting from those students, right? It doesn't cost the college anything (or that much, really) to have another student in a class, it's just that the student isn't forking over tuition.

So it's not money going out of UT, it's just not money coming in, and that seems like an accounting trick to us.

Not surprisingly, Melecki and Hair Balls had a hard time communicating. He was very patient and pleasant, but it took a while before he finally could say he understood what the hell we were talking about. And when he did, he thought we were slightly imbalanced.

He didn't say that -- he seemed like a nice guy, after all -- but we detected a bit of the tone we ourselves might use, for instance, in talking with a dedicated birther.

At any rate, the $4.4 million does not go to pay a vast bureaucracy, or office overhead, or anything like that, he says. It does represent money for scholarships.

A NMS student can apply it to tuition, or can get a check and use it for books or other costs if they have received other grants or scholarships for their tuition.

Okay, but if you made it so that scholarships could be used only for tuition, then it wouldn't cost the university anything, right? It would just mean money wouldn't come in from that particular student, but it's not costing $4.4 million a year to educate the NMS students.

It's just another body in the classroom. It's like if they decided to award one more band scholarship because there was a hot new instrument. There would be some small additional cost to UT, but you wouldn't be hiring anyone new to teach that kid, and the actual cost of whatever books or food he or she ate would be pretty minuscule. But yeah, if you wanted to, you could say it costs UT the $40,000 or so it would have made in tuition over the kid's four years.

So all we're saying is that it doesn't cost UT $4.4 million a year, or it doesn't have to with a few rules tweaks, if you define "cost" as actively spending money. They're not laying that amount of cash out; they're just not getting it in. But if that was a big problem, just accept an additional student who's paying their way when you take an NMS student.

Then again, we got out of the financial world about as fast as we were introduced to it. So we could be totally full of shit, and probably are. We certainly never got an NMS scholarship.

But we still don't think this program "costs" UT $4.4 million a year.

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