The Changing Landscape of Scholarships and Financial Aid
By Matt Konrad
Updated June 2020
As students, families and colleges look toward an uncertain future next fall, it’s becoming clear that the COVID-19 pandemic is the latest in a two-decade-long series of massive upheavals affecting the world of higher education.
Since the turn of the millennium, the conventional wisdom of American college life has been turned upside down. More and more students are taking “nontraditional” paths to college, either by taking time off after high school or returning to college as adults — according to research from Higher Learning Advocates, “Only 13% of college students live on campus, and two-thirds of all students work in order to make tuition payments or other expenses. Two in five students are over the age of 25, and a quarter of all college students are parents themselves.”
In addition, student and family costs have skyrocketed, as tuition has outpaced inflation and state aid to higher education has plummeted. And student loans have gone from a stopgap to both a major source of funding and a crippling source of debt.
As a result of these changes, scholarship and financial aid providers have had to face a new reality — and the impact of COVID-19 has brought it into even more stark relief. Helping high school students get into college is no longer enough. Today, it’s all about full-spectrum assistance for students facing all kinds of circumstances. And, throughout students’ educational journeys, there are three major areas where supporters can make an impact.
Scholarships and Grants
The most traditional source of private-sector student funding is still vital despite all the changes in higher education. Merit-based and need-based scholarship programs have made the difference for tens of millions of students, and continue to do so.
The biggest impact in today’s financial aid landscape comes from renewable scholarships, which provide aid for multiple years as long as students continue to meet certain criteria. With scholarship displacement still a somewhat common practice, and upperclassmen losing out on financial aid as they go through college, renewable awards provide support that goes beyond freshman year.
It’s also increasingly important for students, families, scholarship providers and schools to work together to maximize the impact of scholarships.
“As a result of significant shifts in higher education over the last twenty years, colleges and universities have become much more creative in their admissions practices, financial aid packaging policies and management of institutional funds,” says Mike Nylund, Scholarship America’s Vice President of Client Solutions. “Unfortunately, the majority of scholarship programs are not built on this new paradigm and, as a result, probably not having the impact once envisioned. More so than ever, private scholarship sponsors simply have to become more creative in the program design to ensure their goals are being met; in essence, they need to catch up to the current environment.”
This is even more true with COVID-19 impacting timing, deadlines and the structure of the collegiate calendar — families and scholarship providers need to be informed and flexible, more than ever.
As they make their way through college, students will face more than just tuition costs. Even students who attend school tuition-free often find themselves struggling with transportation, food and other costs of living. Especially now, an unexpected financial setback like a medical bill or a change in housing can threaten to derail them from their academic track.
That’s why emergency aid programs have become such a crucial part of the financial aid picture, and why the CARES Act for coronavirus relief focused so heavily on emergency assistance. These emergency grants — providing small but vital payments on a fast timeline — can often make the difference between persisting and dropping out; Scholarship America’s Dreamkeepers program, established in 2004, distributed almost $3 million last year, keeping 95% of grant recipients in school.
The first programs were funded largely by colleges and nonprofits. Recently, the private sector has started to diversify into the emergency assistance space: Wells Fargo created an emergency program specifically for U.S. military veterans faced with unexpected costs while in school.
With more and more students returning to college as adults — or furthering their education while in the workforce — the private sector is also helping boost graduation rates through tuition assistance programs. Unlike competitive scholarship programs, these programs offer funds on a first-come, first-served basis to help qualified employees or family members cover education expenses.
Tuition assistance programs are particularly valuable for older students who are already in the workforce, and who want to either return to the pursuit of a degree or add to their expertise by pursuing advanced classes. These programs also provide a wealth of options and benefits for the companies providing them. Most famously, Starbucks decided to create a tuition assistance partnership with Arizona State University. The program allows employees of the coffee giant to pursue a bachelor’s degree via ASU’s online university tuition-free, and with the level of flexibility needed in the current college environment.
For both students and funders, it’s a wide new world of options. And whether you’re a high school grad, an adult learner or a scholarship provider, Scholarship America can help you navigate them. Subscribe to our blog or contact us to stay updated.