Every year, more than $100 billion in grant and scholarship money is distributed through educational institutes, private corporations, nonprofit funds, and government organizations for students pursuing a college education in the United States, according to the Education Data Initiative.
Across the world, scholarships are seen as an extremely advantageous solution to financially burdening degrees. However, scholarships are much more than financial coverage for education — they are an integral component of the education system that helps more students achieve success.
In the United States, the college admissions system relies heavily on financial input.
According to an article on the College Board blog titled “The Anatomy of a College Application,” the average college application charges a fee of $40-$90 to pay readers, while the average applicant submits 6.8 applications. As such, application fees alone can incur up to $600 before college education begins.
In fact, students featured in the Opening Doors report explain that they decided to not apply to certain universities due to the financial burden and inability to waive fees. Brookings Research further demonstrates that lower-income students are susceptible to “undermatching,” the phenomenon of enrolling at less prestigious universities than what they are academically qualified for. This undermines academic potential for highly qualified students, stripping them of more inspiring opportunities.
Since financial barriers begin long before enrollment, it is fortunate that scholarships can cover college tuitions. Scholarships do not simply reduce tuition, but also ensure issues like “undermatching” do not continue happening.
According to the American Economic Journal, financial aid has been proven to increase bachelor’s degree completion, while allowing students to pursue extracurricular commitments, academic rigor, and professional involvement without dedicating time to paying tuition. This is integral to allowing the students to get the most out of their college experience and enter the professional world with less regard for financially reimbursing their education.
Ten years down the line, students with scholarships are positively correlated with owning homes, living in high-income neighborhoods, and having better credit trusts, according to the Federal Reserve of New York. These long-term effects persist past college years, reflecting the life-long impact of scholarships in terms of dedication to education and financial burdens.
Meanwhile, students who graduate with debt may be reluctant to take low-paying jobs and will experience more stress to pay off the financial burden. A trend cited by the Kauffman Foundation is the higher tendency for scholarship students to pursue entrepreneurship early in their careers. Instead of dedicating their early years in financial security, scholarship graduates are able to pursue their interests in more risky environments.
Scholarships are much more than a financial alternative to secure a college education. It prevents students from being burdened financially after enrollment, it is a remedy to ensure students can devote their time to college learning, and it facilitates success even later in life. Top-notch scholarships come with not only financial assurance, but also mentorship, educators, and a peer network that provides community and support for life after enrollment. Given the importance of education in the future of the United States, legislators, advocates, and donors alike should realize the importance of scholarships in guiding the new generation of successful adults.
