Scholarships are an important source of financial aid for today’s students and their families. What was once seen as a bonus, has now become a critical piece of the financial aid puzzle. Why? Scholarships help narrow the gap between what students can afford and the rising cost of college. There are other factors contributing to this shift as well, so we’ve created a list of why scholarships are more important than ever and who they can help most.
Four Reasons Scholarships Are Increasingly Important
1. College tuition costs three times more than it used to.
Financially speaking, today’s students are a world away from the campuses their parents remember. Thirty years ago, a student could pay their way at an in-state public university college with a part-time job. Today, a similar job might cover half of the cost.
How did this happen? The largest cost increases followed the financial collapse of 2008. As state lawmakers faced shrinking budgets, higher education became a target for state funding cuts. Colleges responded by raising tuition costs, which means students and families ended up with a bigger bill.
2. State and federal support for students has changed.
The funding situation has been slow to change since the recession. In Washington state, funding has been on the rise more recently. Tuition at our state’s four-year colleges has dropped 12 percent over the past five years. It’s an encouraging trend, yet students and families are still shouldering a historically high share of the cost.
Federal and state aid tends to flow to those with the most financial need, and rightly so. As a result, students with a larger Expected Family Contribution (EFC) have less access to “gift aid.” This is any financial aid that you don’t have to repay. Scholarships fall into this category too, making them a great source of financial aid for middle-class families feeling pinched by tuition increases.
3. Interest and repayment create immense burdens.
Students and families are tapping every possible resource to fund their post-secondary dreams. How America Pays for College shows that families now cover 43 percent of college costs through income, savings and personal loans. As parents sacrifice more to finance their children’s education, home life and relationships are being strained. This means scholarships provide something we can all appreciate—less stress at home.
For many students, and especially those of color, family support is either not enough or not available at all. To make up the gap, students of all means are taking out loans. One in five Americans now hold student debt. According to Experian, the average tally for Portland-metro residents sits at $37,818. Because of this financial burden, people are delaying big life decisions, like starting a family or buying a home. Scholarships offer students a way to avoid racking up debilitating debt.
4. The cost of living has increased.
The average cost for room and board now exceeds $10,000 a year at public colleges, and can rise dramatically based on location. Regardless of setting, these costs add a significant strain to the college experience. While most scholarships can’t cover living costs, they can free up other financial aid for this purpose. To be sure, recipients should check their institution’s outside scholarship policy.
If your scholarship dollars apply to unmet need before other aid, your school may drop a large chunk of change in your bank account. Your job: to stretch it as far as you can. This is an especially tough task for first-time students and those with less experience budgeting. Believe me, it’s easy to come up short when juggling housing, food, books, transportation, laundry and other necessities.
More Students Seeking Scholarships for Financial Aid
The financial burden of attending college is overwhelming. That’s why scholarships are increasingly important, and students are getting the memo. More are searching, applying for and receiving scholarships. The average amount of tuition covered by scholarships has risen nearly 45 percent over the last ten years, from $5,692 to $8,177, according to Sallie Mae.
The Community Foundation has seen the influx of students seeking scholarships first-hand. Our scholarship program has seen rising activity over the last decade, and 2019 marked a record year of awards and applicants.
Our success is all thanks to the generous donors who have established 69 scholarship funds at the Community Foundation. Students can research these funds year-round and apply when applications open every December.
For all the reasons above and many more, we are honored to provide these scholarships every year. They are a critical source of financial aid that provides freedom and opportunity to local students and their families.