What Are Scholarships?
What has been the driving force behind this surge? One reason is the tremendous increase over the years in the number of institutions. According to the Association of American Colleges and Universities, there are now over 2,600 accredited four-year colleges and universities in the U.S. Another reason is cost variance. While ivy league schools can run well over $50,000 per year for tuition, room and board, students can choose private institutions at a cost of around $30,000 or public schools that offer four year degrees at a more affordable $12,000.
But there is a problem. Tuition is rising higher and faster than inflation. Last year, inflation rose about 3.6% while tuition at American public colleges increased over 8%. In addition, the number of colleges whose tuition rose above $50,000 in 2011-2012 increased 23%. How does that compare to the national average for wages in America? The national average is $42,000. So, Americans are facing a rising dilemma on how they can afford to attend college.
Scholarships vs. Loans and Grants
Financial aid is available in the form of student loans, grants and scholarships. Harvard was the first university to offer a student loan program in 1940. Government loans began to appear in the 1930's. Although student loans offer low interest, they must be repaid. This is becoming more difficult in the present economy. Grants are forms of free money that does not have to be repaid. Most are need based and take into consideration the cost of tuition along with how much the family can contribute. They are available at the federal and state level and are primarily designed to help disadvantaged students attend college.
Scholarships are gifts of money awarded to students who demonstrate outstanding academic or athletic ability. They are based on merit. Whether a student is applying for an academic, athletic or artistic scholarships, they must be exceptional in order to be considered. A student applying for an academic scholarship, for example, would need to be in the top five or ten percent of his or her class. Maintaining a high G.P.A (Grade Point Average) in high school is crucial along with achieving high scores on pre-college testing such as ACT or SAT. But grades may not be the only factor that determines whether or not a scholarship will be awarded.
Since scholarships are based on merit, they are designed to attract a higher caliber of student. Merit refers to overall excellence. Therefore, it includes not only academic performance but also accomplishments, leadership capabilities, and contributions to society. Schools are looking for leaders, students whom they believe will not only do well in college but also become outstanding performers in their chosen field and contributing members of society.
Colleges offer scholarships because it draws the cream of the crop to their institutions. It is a good investment in the future strength of our society and also a positive reflection on the institution to have a legacy of famous performers, statesmen or scientists whose careers began at their school. Barack Obama earned his law degree from Harvard and his undergraduate degree from Columbia University, Bill Clinton studied government at University College, Oxford, on a Rhodes scholarship, Brad Pitt attended University of Missouri, James Earl Jones attended the University of Michigan, and famous novelist John Grisham actually received an accounting degree from Mississippi State University. Even Madonna was an excellent student who earned a dance scholarship to the University of Michigan, and Tiger Woods received a golf scholarship to Stanford University.
Most families depend upon some type of financial aid to send their children to college. A typical financial aid package consists of loans, grants, work study and scholarships. Scholarships are unique. They are based on academic merit, so high school students can work towards this goal by getting good grades in school and being involved in activities related to their field of study. A student planning on a pre-med course, for example, would want to maintain a high G.P.A. in the courses required by medical schools like chemistry, biology, physics, math and English.
There are many benefits to high school students to plan for scholarships. It is an incentive to get good grades. Good grades means they have a shot at getting into a better school. Graduating from a better school looks good on their resume and increases their chance at landing a better job. So, it definitely has long-lasting benefits. It is also free money that does not have to be repaid. The more they can get in scholarships, the less they have to depend upon a student loan.
Colleges offering scholarships benefit by drawing better students which increases their ranking among other schools. The higher their ranking, the more prestigious they are, so they can continue to enroll the best students and command a higher tuition. It also increases their endowment funds which are donations of money that enable colleges to offer more scholarships, competitive programs and better facilities. Harvard, for example, has the largest endowment fund of any college in the world.
Scholarships are not just offered by colleges and universities. Scholarships are also available from federal and state governments and private corporations. Most federal and state scholarships are need based. Corporate sponsored scholarships can be offered at the national or local level. The broader they are, the more competition there will be in applying for these scholarships. Its a good investment for corporations. It helps ensure their industry remains vibrant and competitive by attracting the best minds, and it is excellent for public relations. The big benefit for students is the wide variety of corporate scholarships available to help them pay for college. Fortune 500 companies in particular have plenty of money to offer scholarships. The top ten Fortune 500 companies offering scholarships include Wal-Mart, AT&T, Ford, General Motors, United Health, State Farm, Microsoft, Dell, Lowe's and Best Buy.
Some corporate scholarships focus on a particular career field, such as accounting, engineering, health and medicine, nursing, teaching or social work. This is helpful to students in searching for scholarship money and also increases their chances of getting a scholarship by narrowing the field. In addition, there are scholarships for minorities such as African American, Hispanic, Asian, Native American and women which are funded by private organizations and corporations. There are specific scholarships for disabled students, those in the military, older students, and students with severe medical conditions. There are even scholarships available for people who are left handed, twins, and tall—5'10” for women and 6'2” for men.
Scholarships represent an important factor for many in determining whether or not they can attend college. This will continue to be the situation as Americans struggle in the present economy. Most families do not have the financial means to pay for college themselves and must rely on assistance from other sources. Students and parents are reluctant to be stuck with large student loans to pay off after college.
Defaults on student loans are rising sharply, from 7 percent in 2009 to 8.8 percent in 2010 according to the U.S. Department of Education. As college attendance continues to increase, so will the need for scholarships. Whether they are need based or academic, scholarships are key sources of money needed to help thousands of students receive a college education.