As the cost of college attendance continues to escalate, private support through both need- and merit-based scholarships is more important than ever. The sources for private giving available to students continue to multiply. Last year, in federal grant money alone, $2.9 billion was left on the table. With growing concerns regarding college costs, this is difficult to comprehend. Private scholarships unaccounted for, or unclaimed, are impossible to calculate.
The value of scholarship support for students, in spite of those available that are unclaimed, is difficult to calculate. Academic and merit scholarships, as well as first in family scholarships for those students who change the trajectory of a family history by attending and graduating from college, present innumerable opportunities.
Scholarship support may reduce the four in ten students who enter post-secondary education and do not complete their degrees—ever. A Sallie Mae study shows that students borrowing accounts for 18% of the cost of college. Parental borrowing accounts for 9%. Parent income and savings account for 27%, relatives and friends pay 5%, and student income and savings carry 11% of the burden—contributing significantly to college costs. From 2010 until 2013 parent support decreased by 35%, from $8,752 to $5,727. This is all in addition to the 30% of the college tab paid through grants and scholarships.
These facts are important for two reasons. First, families increasingly rely on other parties, public or private, to bear the cost of educating a student. Secondly, this “burden shift” creates greater levels of debt. In addition, lower-income families carry a disproportionate part of this shift of fiscal responsibility. Most alarming in the study is that parents and students alike tend to worry less about the cost of an education as it shifts from personal responsibility to a burden borne by others.
U.S. News reports on the increasing importance of private giving in support of scholarships, and it shows no sign of diminishing. The need for scholarship support is the result of relentlessly increasing costs of a college education and the downhill slide of support from state tax coffers. Moreover, to confound the challenges, higher prices do not always result in a higher quality learning experience. Nearly a decade ago Richard Arum and Josipa Roksa, in Academically Adrift: Limited Learning on College Campuses, cataloged a decreasing return on investment in a college education. The fiercely deliberated findings created polarized perspectives. No surprise, but as is too often the case, students still hold a bag full of promissory notes and are simultaneously underemployed, according to the Federal Reserve Bank of New York.
The need for increased performance-based scholarships, especially from private sources, are real and the benefits great. Ohio, New York, California and other states are experimenting with a combined approach for low-income families—those with the highest need—with performance-based requirements. This may be the sweet spot in the future of scholarship programs. Enlightened donors may see the advantage that combines need and performance to encourage students to make a serious commitment to their education.
Performance-based scholarships often go directly to students, reinforcing the personal responsibility necessary for successful completion of a college education. This is essentially a “play to get paid” approach. The findings from exploratory studies indicate decreased debt with higher graduation and completion rates. Tying rewards and hard work together creates an equation for success according to Adam Smith’s, The Wealth of Nations.
Positive academic outcomes can also accrue to intercollegiate athletes on scholarship. The Center for Disease Control, Harvard and BBC studies confirm exercise and physical activity lead to increased intellectual acuity. NCAA Division I intercollegiate athletics programs number 351 nationally; the other divisions, including community colleges, have a membership of 1,730. Division I programs provide $2.6 billion in awards for scholarships while the balance of the programs contribute about half as much. Of interest, when totaled with other support, Division I schools offer up $5.2 billion, and the remaining athletics programs combined with other forms of support total nearly $6 billion.
Scholarships and financial aid will rarely cover the entire cost of attendance. Combining several sources of support is required, and student employment is one of the best parts of the equation. Working 15 hours per week actually has a slightly positive impact on academic achievement.
In the end, private giving for scholarships is on the rise. Even with increased sticker prices at many colleges and universities, the actual cost to students is going down, if only slightly. This is a recent and welcome change. Private sector support of students in college will continue to make a difference according to the Wall Street Journal.
Higher education is a powerful public/private partnership. Cementing that partnership is scholarship support.