Tia T. Gordon
Institute for Higher Education Policy
202 861 8227

New National Report: Private Scholarships Count

Private Scholarships Play Important Role in College Access, Says Report—Private Sector is Key Partner in Paying for Rising Tuition

  • More than $3 billion awarded in 2003-04—7% of all grants
  • First-Ever National Study of Private Scholarships

Washington, D.C., May 4, 2005—Students receive more than $3 billion per year in private scholarships that help them pay for the rising price of going to college, according to a new national report, the first-ever national study of private scholarship aid. These scholarships stand apart from government and other aid because they help students who slip through the cracks of other programs and facilitate choice and affordability for a wide range of students, says the report. Local communities, corporations, and organizations that support such programs should be encouraged to develop and fund new programs that mirror the success of these existing initiatives.

Private Scholarships Count: Access to Higher Education and the Critical Role of the Private Sector, prepared by the Institute for Higher Education Policy in collaboration with the National Scholarship Providers Association and Scholarship America, finds that private scholarships totaled an estimated $3.1 to $3.3 billion in 2003-04, or 7 percent of all grants awarded. Seven percent of undergraduates receive private scholarships with an average value of $1,982, and 5 percent of graduate students received private scholarships averaging $3,091. The typical private scholarship recipient is a traditional undergraduate between the ages of 18 and 25; from a middle-income family; dependent on his/her parents; and attending a four-year institution on a full-time basis.

While private scholarships seem like a fairly small portion of total aid awarded, they are important because they can be targeted at a local level, the report says. For example, private scholarships are targeted to diverse groups of students ranging from foster children to students with unique academic talents to students who are deeply involved with their communities. Moreover, private aid complements federal and other aid by making college more affordable for both low- and middle-income students, thereby increasing the choice they have to select an institution that they want to attend. The report shows that the private sector is a key though often unrecognized partner in the college financing equation.

The report also estimates that total aid that went unawarded—the so-called “unclaimed” aid that is the subject of numerous Internet solicitations and other marketing efforts—may be approximately $100 million, far less than what is often characterized as billions of dollars in unclaimed scholarships.

The diverse types of providers of private scholarships include community foundations, service and fraternal organizations, corporations, independent foundations, research institutes, associations and national membership organizations, local organizations, and individual donors, according to the report.

Private Scholarships Count includes data from an unprecedented national survey of private scholarship providers, new data from the U.S. Department of Education’s National Postsecondary Student Aid Study, and interviews with private scholarship providers. The study defines private scholarships as grant monies awarded to students from private sources that are unrelated to colleges and universities as endowments or university foundations and designated to be used for postsecondary educational expenses.

The report recommends:

  • Developing and funding new programs that mirror the success of the diverse kinds of programs identified through this study.

  • Increasing communication among private scholarship providers to facilitate exchange of ideas about management, fundraising, student selection, and award distribution practices.

  • Providing capacity-building support for private scholarship programs, especially as it relates to establishing local, community-based programs that can be funded by local dollars and staffed by community volunteers.

  • Conducting additional research that builds on this first national study.

The report was developed by the Institute in collaboration with Scholarship America and the National Scholarship Providers Association with the support of Lumina Foundation for Education. The report is part of the kick-off for National Scholarship Month (nationalscholarshipmonth.org), an annual initiative that provides opportunities for communities to celebrate students’ dreams and accomplishments, recognize the current support to help students achieve their goals, and underscore the ongoing need for continued support of scholarships. AXA Foundation and USA Funds are sponsors of National Scholarship Month.

The Institute for Higher Education Policy (IHEP) is an independent, nonprofit organization that is dedicated to increasing access and success in postsecondary education around the world. Established in 1993, the Washington, D.C.-based organization uses unique research and innovative programs to inform key decision makers who shape public policy and support economic and social development. IHEP’s web site, www.Ihep.org, features an expansive collection of higher education information available free of charge and provides access to some of the most respected professionals in the fields of public policy and research.

Scholarship America is the nation’s largest private sector scholarship and educational support organization. Scholarship America’s programs include over 1,250 grassroots scholarship foundations and over 1,000 corporate-sponsored scholarship programs. The mission of the National Scholarship Providers Association (NSPA) is to advance the collective impact of scholarships by informing policy, and providing opportunities for professional development and the exchange of best practices among private scholarship providers. The NSPA brings together talented professionals from across the United States and Canada who are committed to improving student access to higher education.

Lumina Foundation for Education, an Indianapolis-based, private, independent foundation, strives to help people achieve their potential by expanding access and success in education beyond high school. Through grants for research, innovation, communication, and evaluation, as well as policy education and leadership development, Lumina Foundation addresses issues that affect access and educational attainment among all students, particularly underserved student groups, including adult learners. For more details on the Foundation, visit its Web site at www.luminafoundation.org