Paying for college: Too few scholarships support excellence — we can change that

Lost in the arguments over free college and loan forgiveness are scholarships. Federal grants and loans serve to create an equitable playing field while merit scholarships reward excellence on the field itself. Both support each other, but they are distinct approaches and should be pursued on parallel tracks. There are far too few national scholarships to support excellence. It is time to form public-private partnerships to boost merit scholarships toward meeting national goals. 

According to Mark Kantrowitz, a nationally recognized expert on student financial aid, scholarships and student loans, 1.7 million students receive private scholarships each year. His study shows that most of these scholarships went to students attending four-year colleges. White students were awarded scholarships at greater rates than non-whites (13.8 percent vs. 11.2 percent).

Thousands of local communities sponsor merit scholarships with a large number being directed toward low-income students resulting in poor White, Black, Latino, Asian and Indigenous students earning scholarships. In recent years, the criterion for merit has appropriately expanded beyond grades, standardized tests and sports, which are known to systematically discriminate against a disproportionate number of underrepresented minority students.

Bake sales, church fairs and other traditional forms of fundraising for scholarships can no longer keep pace with the sharp rise in the cost of attending college. Kantrowitz found that 97 percent of scholarship recipients receive $2,500 or less.

National scholarships offer greater potential for expansion and change. They have the ability to provide billions in aid for national goals such as STEM, civic engagement, vocational training and more.

Many large foundations and corporations offer merit scholarships. For example, The Gates Foundation funds 5000 high-performing, low-income students in a program administered by the United Negro College Fund.  Coca-Cola provides $20,000 each in scholarships to 150 students. Both are based on need and a minimum GPA score.

In order for these scholarships to have a significant national impact, the government should create partnerships with businesses, foundations and research universities. At present the National Science Foundation runs a $100 million program for STEM scholarships for low-income students. Why not turn this into a $100 billion scholarship program over five years funded with public funds and private gifts? Colleges with large endowments could also consider joining these partnerships and contributing to the scholarships. 

It’s time for business to show their cards. Many people claim that higher education no longer serves the needs of the country. Let’s invite them into a dialogue that leads to substantial jointly-funded scholarships that can move the needle toward both excellence and equity.

Business will be reticent, however, to join partnerships if colleges are left to freely raise tuition. This is why any reform must be made part of a comprehensive restructuring of college finance. We will miss out on a great opportunity for reform if we continue down the path of just partial loan forgiveness or free college for some but not for all.

Robert Hildreth is a former International Monetary Fund economist whose professional work involved restructuring South American debt and marketing sovereign debt loans. He founded the Hildreth Institute dedicated to restoring the promise of higher education.