Unraveling Scholarship Confusion


The recent kerfuffle over Ben Carson’s stated belief that he had been offered a scholarship to West Point highlights an ongoing source of confusion in the world of college funding: misuse of the word “scholarship.” A quick rehash of higher education history can help resolve this persistent misunderstanding.

Once upon a time, the only way to go to college was to pay for it outright. If you couldn’t pay for it, you couldn’t go; hence, college, for a long time, was a sort of playground for the rich.

Over time, colleges began to expand their reach to include some bright, deserving, hard-working students who couldn’t afford to pay for tuition. These students were offered “scholarships” in recognition of their great academic promise.

As legend spread of this wonderful, magical “free money” known as “scholarships,” parents of modest means began exhorting their youngsters that if they worked hard, they, too, could earn a “free ride” to college. The legend gained great emotional currency among the hardworking middle class, particularly during the Great Depression. This mythology lives on, today. Teachers will still encourage students to study hard because it could mean they will “win” a scholarship to college. Over time, colleges began to award “scholarships” for abilities other than academic, such as athleticism. This was probably the beginning of the diffusion of the meaning of the original word.

Fast forward to the mid-twentieth century, when the federal government began to get involved in offering “free money” to aspiring college students. This changed everything. Suddenly, instead of college money being made available to students based on accomplishment, it was available based on financial need.

Understandable and plentiful confusion has resulted, since many students who received a need-based financial aid award were likely to boast that they had instead gotten a “scholarship.” Misuse of the term “scholarship” ranges from legitimate confusion to outright misrepresentation; this blurring of terminology may also be a relic of the old days when receiving a “handout” was considered something shameful that should be hidden. Scholarships have very positive connotations while financial aid does not, after all, and people are going to represent themselves in the best possible light.

At this point, the term “scholarship” is somewhat archaic and should probably be retired, since it confuses more than it clarifies. That is unlikely to happen, though, since it is such an intriguing, longstanding part of college lore. It is certainly misused regularly to the point that anytime anyone receives money for college from any source today, they are likely to claim that they were awarded a scholarship, so don’t believe everything you hear. This is very inaccurate and misleading, indeed. No wonder college-bound families are full of misinformation!

This blurring of terminology and utter vagueness leads to the vast, hopeful illusion among the American public that somewhere out there is a magical pot of free scholarship money available to pay for their child’s college education if their child can just find it.

pot of gold

Unfortunately, there probably isn’t. It’s also very unlikely that there is an organization or individual that wants to pay for your child’s education for you—unless it’s the federal government or Uncle Sam, and that money comes with strings attached—like interest—so beware. The fact is that most scholarships that are awarded these days are rather small, for one year only, and come from organizations that your family already belongs to, such as a Kiwanis Club or your employer.

The sad reality is that the rise of federal financial aid has seriously and negatively impacted the prominence and availability of scholarships. For one thing, a student who receives need-based financial aid and an “outside” scholarship—say from the local Rotary Club—may see his scholarship absorbed by his financial aid package. In other words, the college can reduce the need-based award, since they can claim he no longer needs as much money. He has another way to pay for tuition! Hence, the impact of scholarships is diminished and complicated by the presence of federal need-based financial aid.

So, that’s the bad news. The good news is that in recent years many college and universities are being more generous by increasing their merit aid awards…which is a whole other discussion.

Want to learn more about how to pay for college intelligently?

Order The New College Reality and check back for info on my new Outsmarting College Tuition course in early 2016!

NCR book cover