Fall 2012

AMERICANS GET CREATIVE WITH COLLEGE FUNDING

Though signs point to a slow economic recovery across most of the United States, it’s evident that families are still struggling to afford everyday expenses, let alone paying for their children’s college tuition. But what is also clear is that despite the dire prediction that college enrollment numbers would tank as the recession took hold, the overall effect was mild (enrollment actually increased 6.8 percent between 2006 and 2010). That’s not to say the recession didn’t affect the landscape of postsecondary education enrollment. The fact that there has been a huge increase in traditional age students – ages 18-29 – opting to attend community colleges instead of four-year institutions, shows that while students may not be foregoing a college education, they are making some tough choices based on what makes the most financial sense for their families (“Recession Reshaped College Enrollment Patterns, but the Sky Didn’t Fall,” The Chronicle of Higher Education, 2011).

Sallie Mae’s most recent study, How America Pays for College 2012, backs this up with its own findings. For the past five years, the organization has been conducting a yearly survey of parents and college students to find out how exactly families are paying for college. And for the second year in a row, the organization found that the 1,600 dependent undergraduate college students and parents who were surveyed are actually paying less for college than they did the previous year, despite tuition continuing to increase at colleges and universities across the country.

So how can this be explained? For starters, families are getting more creative with their personal finances. Many are taking cost saving measures at home in order to have more money available for college tuition. Some are taking a serious look at how much a college costs before they even consider sending in an application. And a growing number of students are opting to live at home instead of on campus in order to save money.

Unfortunately, colleges themselves -- the primary donors of scholarship money -- have also decreased the amount of money they are giving to students for tuition. Last year, colleges contributed 10 percent less to their students’ tuitions than they did in 2011.

If colleges and parents are paying less, then who’s paying more? In part, students had to foot more of the bill -- last year, students paid 18 percent of their tuition through student loans and 12 percent through their own savings and incomes. High-income families, in particular, borrowed more last year -- 27 percent used federal loans in 2012, compared with 19 percent in 2011.

But with college loans projected to exceed $1 trillion in 2012, borrowing more money in order to make up for the gap between family and college contribution should not be the recommended solution.

There is another option: private scholarships. Nearly $3 billion in scholarships are available each year through corporations, foundations and community groups – and awards aren’t limited to students with stellar grade-point averages. Many of these scholarships go to students who can demonstrate merit through some combination of initiative, need, interests and talent.

“We can debate the basis of rising tuition costs, but the fact remains that private financial assistance is out there,” said Lauren Segal, President & CEO of Scholarship America. “For the committed and college-ready student, private scholarships are an option worth exploring before incurring further debt.”

2012 Award Winners Honored at October 25 Dinner

Last month, Scholarship America guests, board members and employees donned cowboy boots and jeans and headed to Iowa for the Annual Awards and Recognition Dinner. The event, hosted by departing board member Dick Schwab at Schwab’s “Celebration Farm” in Iowa City, recognized the organization’s 2012 Dollars for Scholars Award Winners, as well as departing Scholarship America board members.

Scholarship America was extremely excited to formally celebrate this year’s Dollars for Scholars winners.

“We are thrilled to have such outstanding individuals sharing their time and talents with Dollars for Scholars, and it’s with great anticipation and pleasure that we honor them with these prestigious awards at our awards dinner,” said Lauren Segal, president and CEO of Scholarship America.

Honored at the event were Oldham County Dollars for Scholars, who won the 2012 Dr. Irving Fradkin National Chapter of the Year award; Tri-West Dollars for Scholars, recipient of the H. Stuart and Marlys C. Johnson National New Chapter of the Year award; and Ralph “Cy” Seifert National Volunteer of the Year, Kathy Wright, from Greater Riverside Dollars for Scholars. All award winners received $2,000 awards, in addition to the $500 they received for winning the regional competitions.

Also in attendance was Finnie Ng (left) of Los Angeles, who was named 2012 National Student Volunteer of the Year and was awarded $2,500 in scholarships. Finnie was nominated by her local Dollars for Scholars chapter, Abraham Lincoln Sr. High School Dollars for Scholars, for her extensive volunteer work in the community.

"It is an honor to award such a talented and giving young woman with this scholarship. Finnie embodies exactly what Scholarship America and our Dollars for Scholars program is about -- serving communities at a grassroots level to improve the lives of local citizens,” said Segal.

Thanks to the event's Master Sponsors: Principal Financial Group and Bankers Trust.

Additional thanks to the Collegiate Sponsors: Performance Management Group; Kum & Go/Kraus Cares; Meredith Corporation; Wells Fargo and Casey's General Stores.

Don't Fall for These Scholarship Scams

Excerpted from Scholarship America's weekly blog, The Scholarship Coach

For students, differentiating between legitimate scholarship opportunities and scams can sometimes be overwhelming and confusing. Every year an estimated 350,000 students and families are victims of scholarship scams, costing more than $5 million annually. Free scholarship money is always great, but sometimes offers are just too good to be true. When conducting your scholarship search, be on the lookout for these five popular scams, so you can protect yourself and your money.

1. Cash up front: If you see a scholarship offer that requires you to send in an application or processing fee, this so-called “scholarship” is almost always a scam. Even if the offer adds a disclosure statement that guarantees a refund, money you send up front is almost never returned. Application fees are unfortunately one of the most popular scams and deceive thousands of students each year. To protect yourself from these scams, just remember four magic words: never pay a fee.

Scholarships are charitable contributions that are supposed to help your financial status -- not hamper it. Also, beware of loan opportunities that offer a very low-interest loan in return for a small up-front fee. These loans almost never materialize.

2. Free seminar: You may get an invitation or email inviting you to attend a free seminar offering advice on financial aid and providing other helpful knowledge. While this may sound appealing, it’s often a trap. Instead of providing you with credible information, the seminar turns out to be a crafty sales pitch that tries to sell you insurance, annuity, and investment products. Worse, these seminars may try to rope students into overpriced student loans or expensive scholarship matching services. In order to prevent being sucked into this trap, do your homework and always research the seminars. If you are unsure about the legitimacy, call the company or your college financial aid office. If there is no number listed for the company hosting the seminar, this is a huge warning sign.

Also, beware of scholarship matching services that guarantee you’ll win a scholarship or you’ll get your money back. These are most likely not legitimate and should be ignored. Save your time and money and research scholarships and financial aid with people you trust.

3. Rewards without entries: You may have seen pop-up ads that scream, “Congratulations! You have just won a $10,000 scholarship to college! To obtain your reward, please send in a $100 processing fee.” If you did not apply for a scholarship or enter in a specific contest for this money, this is probably a scam. Never send in a processing fee to a questionable source. Scholarships are rewards for those who do the work, not prizes for doing nothing.

4. Time-sensitive scholarships: Time-sensitive scholarships do not mean scholarships with deadlines. Nearly all scholarships have a certain date by which an applicant must complete and submit their application. In contrast, time-sensitive scams are on a first-come-first-served basis. Most of the time these scholarships claim to be available only for the lucky applicants who get in first, and are paired with unsolicited offers of scholarship money -- a sure sign of a scam. If it’s a legitimate scholarship, all of the applicants are applying on a level playing field at one time.

To find out what final scholarship scam you should avoid, and to view even more useful scholarship tips, visit The Scholarship Coach on the US News & World Report website. The Scholarship Coach is written by Scholarship America and updated every Thursday.

KEEP CONNECTED WITH SCHOLARSHIP AMERICA

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We also invite you to volunteer at the local or national level. Contact the national office (800-279-2083) or find your local Dollars for Scholars chapter here. Our volunteers come together in communities across America to work on behalf of local students – and they’re always looking for more help!

Finally, your monetary gift makes a huge difference in the lives of students. A gift of just $1 a day – for a week, for a month, or for a year – can help ensure that students are able to achieve their goals. To give, visit scholarshipamerica.org/donate.php.