by Katherine O'Brien, Certified College Planning Specialist
Confusing. Stressful. Complicated. That's how most people feel about the whole topic of paying for college.
Parents are afraid. Students are clueless, not having any concept of the meaning of money, of the real cost of anything.
Parents are afraid, unsure what is real – there is SO much conflicting and confusing information out there! In part, this is the case because the rules keep changing and there are variations from college to college and, even, alarmingly!, from year to year.
Scholarships Basics
Some Recent Stats
$46B scholarship dollars awarded in 2023, per the DOE. Scholarships and grants typically cover around 29% of college costs. Of that 46B, $8.2B was private scholarship dollars. Therefore 17% of scholarship dollars in 2023 were awarded by private organizations. The other 83% came from the colleges themselves.
Scholarships often enable students to afford a more expensive college than they could have attended without receiving the scholarships.
A greater percentage of scholarship recipients were attending very or moderately selective colleges than those who don’t receive scholarships (85% v. 75%). Students who enroll at very selective colleges are twice as likely to have won scholarships than students at open admission colleges (17.7% v. 8.5%).[1]
Students with GPA over 3.5 is more likely to win scholarships. Also, students who file the FAFSA are more likely to have won scholarships than those who do not file the FAFSA (17% v. 9%). 85% of students who receive scholarships file the FAFSA v. 72% of students who do not receive scholarships. Also, students at private colleges are more likely to have won scholarships than those at public universities (19% v. 14%). Lastly, while more students majoring in STEM fields win scholarships than those with other majors, it’s not a significant difference (16.6% v. 14.6%)
About 1/7th of students receiving scholarships receive them from private organizations. The total number of private scholarships has increased (20% from 2015/16 to 2019/20, per the National Postsecondary Student Aid Study). The total amount of private scholarships has also increased. The average private scholarship amount in 19/20 was just over $4,900 amongst students in bachelor’s degree programs.
Want a Full Ride?
Be aware that only 1.4% of undergrad receive gift aid covering their full cost of attendance (COA). Gift aid includes all types of grants and scholarships. 3% have enough gift aid to cover 90% of the COA.
Financial Aid impact
Simply speaking, this is how need based financial aid eligibility is determined:
COA – SAI – Resources = Need
Scholarships affect need based eligibility dollar for dollar. COA is the complete cost of attending a particular college for a particular year. It is an official number determined by the college. It might vary from major to major or college to college within a university, but not student to student. The COA includes tuition, fees, room, board, as well as a school determined amount for transportation, books, equipment, supplies, and miscellaneous expenses. SAI is the Student Aid Index, which is determined by the FAFSA (Free Application for Federal Student Aid) formula. The SAI is determinative for federal aid and most state aid; many colleges also use it to allocate their own need-based aid funds. Resources include monies paid by “outside sources.” This includes grandparents and other people as well as scholarships not directly granted by the college.
Because scholarships directly impact need-based aid eligibility, it is ESSENTIAL that you know whether you will be eligible for need based aid at colleges your child might attend. We’ll discuss this further in part two of this series.
Some scholarships are awarded for four years, while others are for one year only. Four year scholarships typically have requirements which must continue to be met in order to continue to receive them. Most important among these are the requirements of how many credits per term must be taken and the minimum GPA the student must achieve. Together these are called Satisfactory Academic Performance (SAP).
