Scholarships – Part One
There are generally six main ways a person can pay for a college education in the United States: Funds from parents, grandparents, and other loved ones; funds previously earned or secured from the individual student; loans incurred by parents, grandparents, and other loved ones; loans incurred by the students; earnings by students from work while attending college; and scholarships. Many students use a combination of these methods.
Scholarships have a substantial advantage over each of the other four methods in that funds secured through scholarships are typically provided as grants. While there are some scholarships that do have obligations that you must meet after receipt, there is typically no obligation for recipients of most scholarships to pay back funds either directly or indirectly.
Using scholarship funds is one of the best ways to reduce the actual direct cost of receiving a college education.
Scholarships can come from many different sources. Two of the most prevalent are scholarship provided by the government and scholarships provided directly by the college or university that the student is attending at the time. We will explore those options in another news series.
During the month of August, The Chronicles Of Grant County will be detailing ways that residents of Grant County can consider using private scholarships to pay for college education. These types of scholarships are issued, for the most part, by individuals and organizations unaffiliated with a specific college or university.
The "How America Pays for College" Report issued by Sallie Mae in 2021, indicated that while "scholarships are a key source of free money…some students never apply. Scholarships were used by more than half of families (56%) and covered 16% of education costs in AY [Academic Year] 2020–21. Both the frequency of using scholarships and the percent of cost covered are consistent with last year's findings."
This research report has been issued annually by Sallie Mae for fourteen years. Sallie Mae is a public corporation. It used to be structured as a government-sponsored entity. Its main focus in consumer banking revolves around private education loans as well as credit cards and savings accounts.
Some key findings detailed in this report are as follows:
"About 6 in 10 who used scholarships received them from the school the student is attending, with an average of $9,797. Scholarships from states, non-profit organizations, or companies also provide a significant contribution in helping families cover the cost of college. Among families who relied on scholarships, 28% report using a state scholarship with an average amount of $3,145; another 29% used scholarships from companies or non-profits, with an average of $1,922."
"Forty-four percent of families did not use scholarships to help pay for this academic year. Of these families, only 22% say the student even applied. Why don't more students apply to try to win free money? The top reasons vary across parent and student study participants."
"For parents, it's mostly about awareness: 29% say they didn't think there are scholarships for their child and 25% simply didn't know about any scholarships."
"For students, it's more of a cost-benefit analysis: 44% of students said they didn't apply because they didn't think they'd win, 28% didn't have time to apply, and 20% said it was too much effort to complete the applications."
"Only 6% of families who did not apply for a scholarship say they didn't need additional funds."
You can view the entire "How America Pays for College" Report by clicking here:
In the next edition of The Chronicles Of Grant County, we'll detail one of the databases available for local folks to search for scholarships that might be available to prospective college students as well as current college students in communities in Grant County.
This graph shows that, on average, the typical family used scholarships to pay for 31% of the costs for a college education in Academic Year 2018-2019 and used scholarships to pay for 25% of the costs for a college education in both Academic Year 2019-2020 as well as Academic Year 2020-2021. (The image and legend are from the "How America Pays for College" Report and is provided courtesy of Sallie Mae, 2021.)
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