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Four Ways Scholarships and Financial Aid Can Make a Bigger Impact

By Matt Konrad

When it comes to paying for college, scholarships and grants are a huge piece of the puzzle: nearly 60% of families used scholarships to cover part of the cost (the second-biggest source of funding, after parent contributions), and just under 50% used grant money. Grants and scholarships are absolutely vital—but they aren’t always doing as much good as they could.

On a federal level, Pell Grants have long provided a source of hope for students from low-income families striving to pay for college. But the purchasing power of the grant, which has a maximum award of $6,495 per year, has stagnated: according to NCAN, “At its historic high, the Pell Grant covered nearly 80% of the cost to pursue a bachelor’s degree at a public institution. That figure for this coming academic year is only 29%.”

In the world of private scholarships, the story is too often the same. First generation students and students of color are about 1/3 less likely to receive scholarships than their white and non-first-gen peers. Students in the top income quartile receive more than twice as much private aid as those in the bottom quartile ($2,813 vs. $1,219).

Scholarships and grants can do a world of good for the students who need them most. But it’s up to scholarship providers and supporters to expand the reach of this valuable financial aid. Here are four important avenues for making that happen.

Impacting A Wider Array of Students

For the last two decades, the demographics of the “typical” college student have been shifting. Today’s student, on average, is older; more likely to be working at least part-time; and less likely to be living on campus.

Increasingly, they’re also coming from traditionally underserved backgrounds and low-income communities; unfortunately, those students are at the highest risk of dropping out. Black, Pacific Islander and American Indian/Alaska Native students are at the highest risk, leaving 4-year colleges without a degree at rates greater than 35% within six years. (For white students the rate is 20%; for Hispanic students, 26% and for Asian students 14%).

Why are they leaving? According to EducationData.org, 38% of students cite financial pressure as their main reason for dropping out, versus 28% citing academic disqualification and 13% citing social fit. When it’s tough to make ends meet, it’s even tougher to succeed in college.

Getting these students the help they need often means rethinking the scholarship to provide larger award amounts, broader eligibility and renewable support. (These are the guiding principles of our Dream Award program.) By expanding eligibility and providing ongoing assistance, we can help these traditionally underserved students persist in their education and complete their degrees.

Recognizing the Institutional Aid Gap

Across the country, many of these students with high need are ending up at schools that are struggling themselves: underfunded community colleges and what the Chronicle of Higher Education calls “new” universities: traditional schools working to provide a research-university experience to more students.

“New universities are particularly resource-starved. The funding structure of higher education has changed to where even public schools are more dependent on private funds. Nonresident tuition, philanthropic investments, corporate donations, donations from others — these schools get less of that. And as a result, they’re often trying to do more with less.”

Whether students are learning online, attending school part-time or pursuing a full-time degree at a school without Ivy League resources, it’s up to private scholarships to help fill the gap. Eligibility criteria that include upperclassmen, community college transfers and older students can help do so—and it’s also important to shift our mindset as scholarship providers, and to recognize that any degree or certification can be valuable, not just those from traditionally prestigious schools.

Supporting Diverse Journeys

In much the same way,  both schools and scholarship providers need to broaden our thinking across the board: we’re not just helping high school seniors go off to college and live in dorms.

We’re also helping full-time employees, trying to finish their degrees a course or two at a time, while taking care of their kids. And first-generation students who graduated high school during a pandemic, and who are just now considering their next steps. And fully online students, motivated to earn a certification or degree but needing more flexibility than traditional college may offer.

These groups all have diverse pathways to degrees and distinct needs, but they all share a need for accessible and impactful financial support – support which private scholarships can provide.

For students on campus, new ideas are also necessary. Freshmen across the country faced unprecedented struggles in 2020, as the pandemic forced campus closures, virtual classes and a lack of socializing during the crucial beginning of college. At Georgia State University, 2020’s freshman class struggled in an unprecedented way in the face of pandemic-related restrictions and virtual classrooms.

To help these students get back on track, GSU thought outside the box and established a summer accelerator program: core courses, taught by professors who specialize in freshman instruction, all with support from peer mentors. To date, 750 rising sophomores have signed on for the mix of online and in-person classes, with their tuition paid for by GSU’s federal stimulus funds. This model – institutional academic support plus outside tuition assistance – could be a powerful example of more diverse and impactful support in both the public and private sectors.

Funding the Real Cost of College

Last but not least, we can expand the reach of financial aid by being clear-eyed and realistic about the true cost of college.

On a federal level, that starts with increasing the purchasing power of the Pell Grant. Scholarship America has joined with thousands of others to support legislation doubling the Pell Grant over the next five years – an ambitious target, but one that will help countless students in need.

For private scholarship providers, supporting the real cost of college means increasing our flexibility in funding, and allowing students to use award dollars when and how they need them most. That effort can take many forms: deferring payments to avoid award displacement; providing scholarships that can be used for supplies, fees and living costs; and working closely to understand student needs rather than issuing one-size-fits-all award checks. (It also means working to ensure fair tax treatment of scholarships.)

By funding the true cost of college; recognizing and filling aid gaps; and expanding the diversity of our programs, we can extend the reach of scholarships and financial aid to the students who need it most. Get in touch if you’re ready to learn more and work with us.

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