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House Bill 266: Scholarship Award Displacement

How Central Scholarship Led the Passage of the First State Law to Restrict Scholarship Award Displacement


Research Identifies the Issue

  • The National Association of Scholarship Providers (NSPA) issued a paper, Impact of Award Displacement on Students and their Families: Recommendations for Colleges, Universities, Policymakers, and Scholarship Providers.

  • Dr. Jon Oberg, retired US Department of Education Researcher and federal whistleblower on scholarship award displacement, spoke with Central Scholarship’s Board of Directors.

Develop Public Awareness of the Issue

  • Central Scholarship published an op-ed about scholarship award displacement in The Baltimore Sun.

First Year: Legislation is Crafted

  • Central Scholarship inspired Delegate Dana Stein to introduce Maryland House Bill 231: Public Institutions of Higher Education – Financial Aid – Reduction Prohibited.

  • Delegate Eric Ebersole introduced Maryland House Bill 230: Institutions of Higher Education – Reduction in Financial Aid – Notification in response to a legislative scholarship being displaced by a private Maryland university.

  • Public and private higher education institutions in Maryland opposed both bills on the grounds they would be forced to violate federal financial aid law.

  • Central Scholarship met with elected officials, built a coalition, leveraged their local and national network and traveled to the Maryland State House to testify in the House and Senate committee hearings.

  • The Senate bill passed unanimously but the House bill never received a vote.

Second Year: Legislation is Passed!

  • Delegate Dana Stein introduced a bill that would protect private scholarships from being displaced for 138,000 students attending 4-year public higher education institutions in Maryland.

  • This bill had strong support by local organizations including the Baltimore Community Foundation, Civil Justice Inc., CollegeBound Foundation, and the Maryland Consumer Rights Coalition, and by national experts including: Kevin Fudge of American Student Assistance; Mark Kantrowitz, then with Cappex; David Levy, then with Edvisors Network, Inc; and Dr. Jon Oberg, retired from US Department of Education.

  • In April 2017, the bill passed in both the Senate and House chambers and it was signed into law by Governor Larry Hogan that same month.

  • Maryland was the first state in the nation to restrict scholarship award displacement!