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Today, there is an even greater reliance on scholarship funding for post-secondary education than in years past.
The cost of tuition has tripled over the last 20 years with an annual growth rate of 6.8%, according to ThinkImpact. So it likely comes as no surprise that more students are seeking out scholarships today to help pay for college.
In fact, 60% of families use scholarships to pay for college, according to Sallie Mae, and 71% seek federal aid to assist with education payments. Scholarships and grants cover an average of $7,500 of annual academic costs per student, according to the Education Data Initiative.
There are many sources of funding for scholarship programs, and donations have increased from foundations, corporations, and alumni. In 2021, charitable giving to US-based colleges and universities increased 6.9% to $52.9 billion from $49.50 billion in 2020, according to the Council for Advancement and Support of Education,
Foundations and alumni are the lead benefactors of higher education, contributing a combined 56.3% of all gifts in 2021, according to CASE. Foundations contributed slightly more than alumni, at 33% vs. 23%, but alumni gifts experienced the largest year-over-year growth, rising 10.8%. Non-alumni contributions totaled 17.4%.
The most common source of scholarships is from the student’s own university, with 62% of families using that to cover an average of $6,335 a year in payments. Financial aid from states, corporations, and nonprofits tied for second with around 38% of families utilizing them and average awards coming in the low- to- mid $2,000s, Sallie Mae reported.
The US Department of Education awards about $46 billion in scholarship and grant money annually, and first-time undergraduates awarded these funds can expect to receive about $13,690 on an annual basis. Public educational grants tend to be needs-based vs. other qualifications.
Scholarships from private sources award more than $7.4 billion annually, a figure that more-than-doubled over the last 20 years, the Education Data Initiative reported.
Students are learning about and accessing financial assistance from a variety of sources, though competition remains stiff and not all students are leveraging the opportunity to its fullest potential.
Despite more than 1.7 million scholarships being awarded each year, only 7% of college students receive one, according to the Education Data Initiative. Among families who did not use scholarships last school year, just 32% said they applied.
Some families didn’t apply because of application confusion or common misconceptions about the program and process. Nearly half of college families believe scholarships are only available for students with exceptional grades or ability, while 36% say they don’t think it’s worth applying if the parents are high earners.
Pell grants, reserved for students whose families make less than $25,000 annually, gave an average annual award of $4,418 to students awarded the grants during the 2018-19 school year. However, an estimated $3.75 billion in Pell Grants went unclaimed in 2021 because students did not complete the Free Application for Federal Student Aid (FAFSA).
While student athletes sometimes get a disproportionate share of scholarship money, more money is flowing to students with academic focuses in humanities, health, and science.
While athletic scholarships are offered to less than 2% of high school students, they award a whopping $3.6 billion in combined awards annually.
More than 33% of private scholarships are provided to STEM students, according to Think Impact, with that number growing in recent years as major technology and engineering companies have invested in developing STEM talent.
By college major, the humanities comprise 16.3% of total federal funding; followed by health concentrations, at 18.4%; business/management degrees, at 15.9%, life sciences majors, at 7.5%; social/behavioral sciences, at 7%; and engineering, at 6.1%.
Based on this year’s stats, an area for serious review is Diversity, Equity, and Inclusion (DEI) in scholarships. There is still much work to be done to create more equitable scholarships.
The chances of a white student getting a scholarship are 14.2%, compared with 11.2% for minorities. Among minorities, black students have an 11.4% chance of winning a scholarship, compared with 9.1% for Hispanic students and 10.5% for Asians.
In 2016 – which encompasses the most up-to-date breakdown of federal grants by demographic according to the Education Data Initiative – white students were awarded 52.8% of all federal grant money, while Hispanic students were awarded 20.3%, and black students were awarded 15.5%,
Middle-income students won 13.8% of scholarships, compared with 10.6% of students from low-income households, according to Think Impact.
These 2022 scholarship trends indicate a market ripe for growth amid all-time-high tuition costs and economic uncertainty. But ensuring that your program is found by qualified students, has an equitable and easy-to-navigate application process, and gathers the right data to demonstrate impact takes some intentionality. Building your program on a strong scholarship management foundation empowers your organization to maximize its impact and help scholars pay for life-changing access to higher education.
If you’re still dealing with the headaches and limitations of managing your program with spreadsheets or a home-grown system that lacks the ability to adjust to the changing needs of students and technology innovation, it may be time to investigate a scholarship management platform, such as ZengineTM by WizeHive. Schedule a demo with us today!