What is scholarship displacement?
Scholarship displacement is a practice where colleges and universities displace previously awarded financial aid when a student is awarded a private scholarship, effectively reducing the amount of financial aid awarded and resulting in a zero net gain for the student. This is a practice that many students are not aware of and don’t realize that it happens to them when they receive an external private scholarship.
Negative Impact of Scholarship Displacement
- It forces low-income students to replace displaced financial aid with loans or work, which directly contradicts the purpose of private scholarships.
- 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 institutions than students, which is not the intent of private scholarships.
- It diminishes the intention of scholarships to make higher education more affordable to low-income and underrepresented students.