The only constant in the world of higher-education financing is change.
In the early 2000s, college students -- especially those at public universities -- could rely on generous state and institutional aid to keep their out-of-pocket costs low. As that state aid faced cuts in the last decades, scholarships and grants became the single biggest piece of the average student's funding.
Now, it's parents' turn.
In 2015 parents’ contributions outpaced scholarships and grants as the largest college funding source. In 2016 scholarships and grants took over the largest piece of the pie -- but not by much. Sallie Mae’s 2016 How America Pays for College report found that scholarships and grants make up 34% of total higher education payments, but parent savings and family support is not far behind at 29%. As we discussed in a 2015 blog post:
Parents were also key players in helping with costs outside of college. ... [T]he Pew Research Center published an analysis of Census data, finding that 18- to 34-year-olds are more likely to be living with their families today than when the recession hit. The report cited 'cyclical labor market conditions' for young adults gravitating toward shared living quarters. The upside of living at home was that more students enrolled or returned to college, gaining additional skills during a rough economic time.
Making that transition to (or back to) college, though, means parents and students are both keyed into the same reality: that the cost of higher ed is often more than what they can afford. ... These realities have forced families to be creative about their payment options; for example, an increasing number of students work while attending school (73 percent, up from 62 percent last year). But they also mean that family circumstances, economic recovery and other factors squeeze students’ ability to pay for their education, even as they try to focus on their studies.
Every student’s situation is unique, but one thing is all too common: a financial gap that needs to be filled with parental contributions, money-saving efforts or more time at work.
How scholarships can benefit students, families and communities
That gap is why scholarships are more important than ever. By taking some of the financial pressure off of students and families, we can enable greater success in college, helping deserving students who want to graduate with their degree and give back to society.
At a recent Scholarship America event, we heard about the impact of scholarships from higher education leader Jamie Merisotis, President & CEO of the Lumina Foundation. He received a variety of funds for school, from Pell Grants to state scholarships. “But the most important piece of that equation,” he said, “was that scholarship I received from that Dollars for Scholars chapter in Manchester, Connecticut, because that scholarship represented my community. It represented the people that I was accountable to, and it made a real difference in my life.”
Whether it's their workplace, their parents' employer or their local community, that personal scholarship support does more than pay some bills. It also instills a greater sense of belonging – and motivation – to make it through their higher education. Scholarships are more important than ever from a financial perspective -- and your scholarship program is crucial to the students in your community.