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Colleges’ Anti-Scholarship Policies

Colleges’ Anti-Scholarship Policies

What seems like an oxymoron may actually be reality.

Elizabeth Hoyt

October 15, 2013

What seems like an oxymoron may actually be reality. Colleges are making it difficult, if not impossible, for students to attend school completely free of charge, even if they receive scholarship aid.

Often times, schools require students to pay a portion of their tuition bill out of pocket, regardless of the amount a student has been given for financial aid.

What’s more? The students are prohibited from applying their awards or financial aid to the fee!

Here’s a breakdown of what’s really happening:

The Truth

According to a recent report released by the National Scholarship Providers Association, policies are in place at 10 of the 61 colleges surveyed.

Unfortunately, the numbers are much higher nationwide. MarketWatch confirmed that more than 36 colleges nationwide, both public and private, “require students to make some payment towards their education cost (tuition, room and board, or fees). And that’s just who they confirmed.

This is true even when outside groups award full need-based private scholarships,” according to an article on the MarketWatch web site.

This practice has actually been around for years; however, the recent data was the first to determine the widespread nature of the practice.

The policy is particularly severe in its impact on students from lower-income families, as those find it the most financially difficult to pay and usually receive the need-based awards.

Fees are generally a flat-payment anywhere from $1,500 to $4,000 annually or, at some schools, is a calculated percentage, around 25 percent, of their assets.

Why?

Colleges do this for a couple of reasons. First, many believe that students who have to pay out-of-pocket will theoretically become more invested in their studies.

Second, some colleges use the policy as a tool to determine a student’s financial need, rather than utilizing other resources available to them, like the FAFSA (Free Application for Federal Student Aid).

This indicates a major shift in the way colleges deal with financial aid, since it used to be common practice to use the FAFSA as the primary indicator of a student’s financial need.

Unfortunately, this practice often results in the school expecting a contribution higher than the federal calculation – leaving families with tuition bills they cannot afford.

The hope behind the policy is to strategize in order to re-distribute the funds allotted to financial aid offices when students have scholarships to supplement the aid they would have received otherwise. That way, colleges are able to take that aid and give it to another student in need.

Policies

Many colleges have policies in place that “won’t allow scholarships to lower students’ out-of-pocket expenses, and they effectively penalize students who aren’t wealthy,” according to MarketWatch.

This practice basically contradicts the advice of guidance counselors everywhere: work hard to submit your scholarship applications so you won’t have to take out loans for school.

Terms to Look Out For

The fees are commonly referred to as a “minimum student contribution” or a “summer earnings expectation.”

The latter term’s reference to “summer” is derived from the colleges’ belief that a student should work over the summer to contribute financially to their education.

Exceptions

Some schools do, however, permit merit-based scholarships to be used towards the student contribution fees. Merit-based awards are those in which a student earns for grades, rather than financial need.

What’s Up with That?

Critics of the policies generally believe that they’re stacked against students from lower-income families.

For example, colleges are willing to accept a private check from, say, a student’s wealthy family member but not a private organization that awards the student financial aid, even though the bill will be getting paid in the end.

Additionally, the amount is often scaled – cheapest for freshman and increases as years go on, so the fees are highest for college seniors.

As a result of this policy, students are financially strapped for the funding. The colleges’ response? They suggest you sign up for student loans.

Seriously, what’s up with that?

So, before you apply, make sure your potential schools aren’t part of this policy.

Because, when you earn a scholarship, you should have the right to use it towards your education, without being penalized for it, right? We thought you’d agree.


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