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For the Media

Winter 2012

FROM POVERTY TO PROSPERITY
College degrees are essential to students from poor families

Throughout high school, Gina was an excellent student and heavily involved in extracurricular activities. But going tocollege seemed like a distant dream. After her mother died when Gina was only three years old, Gina’s father struggled to make ends meet. He remarried, but when her stepmother was diagnosed with cancer, medical expenses made living on their meager wages impossible.

Gina After losing their home, the family was left having to survive on welfare. "Needless to say, there was no money for college. I didn’t give it much thought. I didn’t know if I should, or if I could. I truly didn’t know where to begin,” says Gina. Evidence suggests that the best ticket out of poverty for young people like Gina is through postsecondary education of any kind—no matter what their gender or race.

Individuals who hold college degrees earn an average of $20,000 more per year than someone with just a high school diploma. In 2008, the median family income for those who held at least a bachelor’s degree was over $100,000, compared to under $50,000 for individuals with only a high school education.

The basic level of education that a person acquires will influence every aspect of his or her life. People with a postsecondary education are more likely to have access to quality health care, save money for retirement and have the ability to send their own kids to college. They will also contribute more to the economy— spending more money, paying more taxes, and volunteering more in the community.

But for young people like Gina, simply being born into a poor family can end up determining one’s lifelong path. Though college seems like the obvious choice for a ticket out of poverty, only 29 percent of those who grew up in low-income families actually complete college, compared to 74 percent who grew up in upper income families. In addition, two-thirds of kids with average math scores and low-income parents wind up not going to college, while almost two-thirds of high-income kids with average math scores do go.

Social disadvantages and a lack of academic preparedness make college access that much more difficult for those from low-income families. But for Gina, and many other students like her, the largest barrier that stood in the way of her college education was cost. As tuition escalated throughout the 1990s and 2000s, the percentage of academically qualified low-income high school graduates attending four-year colleges fell, from 54 percent in 1992 to 40 percent in 2004, and the percentage of qualified moderate income students dropped from 59 percent to 53 percent.

Fortunately, thanks to private scholarships, Gina’s story has a happy ending. After attending a college recruiting event at her high school, Gina was introduced to her local Scholarship America Dollars for Scholars® chapter, who told her that scholarships could help pay for her college education. After filling out her first application to a university, she also applied for a Dollars for Scholars scholarship—and ended up receiving an academic scholarship that covered her tuition at the University of New Orleans.

“I’ve been on quite a journey since receiving my Dollars for Scholars scholarship,” Gina says. “I consider myself fortunate to be where I am today—and I’m convinced that I would not have even considered college had it not been for encouragement from a few caring people and the award from Dollars for Scholars.”

HIGHER EDUCATION: AN ECONOMIC IMPERATIVE
President Obama addresses debt struggles, community college importance in the State of the Union

President Obama has recently turned up the spotlight on the issue of college affordability and community colleges, first in his State of the Union address in January and again a week later when he kicked off a broad campaign for college affordability, calling higher education “an economic imperative that every family in America should be able to afford.”

Scholarship America believes that college affordability is the most important issue affecting our country’s economic health, and we strongly support programs that will improve college affordability for all students. We believe that the solution lies in a multi-pronged approach that includes changes in public policy, such as those proposed by the president, as well as an increase in the number of private-sector scholarships available to students—especially those that are renewable and assist students in completing their programs and degrees with manageable debt.

Among the issues raised by the president in his State of the Union address, three stood out:

1. Student Loans: student loan interest rates are expected to double in July of this year—going from 3.4% to 6.8%—costing students an average of $40 more on their monthly loan payment and a $2,000 increase over the course of paying back the loan. In his State of the Union speech, the president asked that
congress step in to stop this from happening.

2. Federal Work Study positions: the president proposed doubling the amount of Federal Work-Study positions for students. Currently, Federal Work-Study jobs help more than 700,000 students earn money to pay for college. President Obama’s proposal would double the number of Federal Work-Study jobs, giving 1.4 million students access to this type of financial aid.

3. Community Colleges: President Obama spoke to the importance of community colleges and pledged to give community colleges the resources they need to become community career centers. This point was illustrated through a story about a single mother from North Carolina, seated next to Mrs. Obama during the State of the Union, who chose to take classes at her local community college in order to get the necessary skills to work in a factory near her home.

While we recognize that many details still need to be worked out, we support programs that ultimately help more students pursue and complete their postsecondary certificates, programs and/or degrees without crushing debt burdens. As the details unfold, Scholarship America will continue its work to provide private scholarships as an important part of the solution, emphasizing the need for more renewable scholarships to support degree completion.

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Winter 2012

FROM POVERTY TO PROSPERITY College degrees are essential to students from poor families

50TH ANNIVERSARY YEAR GOES OUT IN STYLE

HIGHER EDUCATION: AN ECONOMIC IMPERATIVE President Obama addresses debt struggles, community college importance in the State of the Union

THE INSIDE VIEW: NOTES FROM SCHOLARSHIP AMERICA

FROM POVERTY TO PROSPERITY
College degrees are essential to students from poor families

HIGHER EDUCATION: AN ECONOMIC IMPERATIVE
President Obama addresses debt struggles, community college importance in the State of the Union