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Scholarship Award Displacement

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Scholarship Award Displacement

Scholarship award displacement happens when a student’s institutional scholarship is reduced upon receipt of a private scholarship. Every year, private scholarships account for $16 billion in financial aid intended to benefit students pursuing higher education. Private scholarships should not impact institutional scholarships. As a private scholarship provider, we have worked to protect Maryland students from award displacement and continue our advocacy to make sure students across the nation receive protection.


How Scholarship Award Displacement Works

Taylor received a $5,000 scholarship from State University and a $5,000 private scholarship from Central Scholarship.

silhouette of student

$5,000
scholarship from State University

single stack of money
plus

$5,000
scholarship from Central Scholarship

single stack of money
equals

$10,000
in total scholarships!

two stacks of money

Federal financial aid law requires Taylor to report her private $5,000 scholarship from Central Scholarship to State University.

silhouette of student

Hi State University! I'm happy to tell you I received a $5,000 scholarship from Central Scholarship!

That's great Taylor! Since you have found a $5,000 private scholarship we will be withdrawing the $5,000 State University scholarship.

icon of university building

Because Taylor found a private $5,000 scholarship, State University is allowed to take away her $5,000 scholarship.

$5,000
scholarship from State University

single stack of money red x
plus

$5,000
scholarship from Central Scholarship

single stack of money
equals

$10,000
in total scholarships!

two stacks of money
red x
silhouette of student

Now Taylor only has $5,000 in scholarships.

$5,000
scholarship from Central Scholarship

single stack of money
equals

$5,000
in total scholarships

single stack of money

  Warning! Your award letter can change several times in an academic year.


The Impact of Scholarship Award Displacement

  • It forces low-income students to replace displaced institutional scholarships with loans.
  • It punishes students who took the time and effort to find private scholarships.
  • It creates a system where privately funded scholarships could provide more benefit to the University than the student, which is not the intent of private scholarships.

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