Study tracks scope of private scholarship aid

University Business, July, 2005

The first-ever study has been released on how much aid the private sector contributes to the student aid equation, and the authors hope the data will encourage more private-sector investments in higher education.

The study, "Private Scholarships Count: Access to Higher Education and the Role of the Private Sector," found that total private scholarship aid was between $3.1 billion and $3.3 billion in 2003-2004, a unexpectedly high figure.

About 7 percent of undergraduate students received private scholarships, with an average value of $1,982, according to the study, compared with 5 percent of graduate students who received $3,091 in private scholarships, and 10 percent of professional students who received an average of $5,029 in private scholarship aid.

Private scholarships have been a part of the college financing equation for decades, but no systematic effort has ever been made to estimate how much private aid is awarded and to whom.

"We were interested in understanding what the role of the private sector is in the student aid equation," says Jamie Merisotis, president of the Washington, D.C.-based Institute for Higher Education Policy (IHEP), the organization that authored the study.

Private scholarship aid is defined as money given to students for college from private sources that is not expected to be repaid. An estimated 5,000 private organizations invest in scholarships.

One goal of the study is to seek awareness for the need for further private support of higher education, which donates more money than the federal government could ever dish out, explains Mark Malmberg, manager of public affairs and communications for the Minneapolis, Minn.-based Scholarship America, a project partner. "Let's face it: The government can only do so much."

"One of the things that we're hoping for is that the private sector will be more involved because traditionally when we have these conversations, the private sector isn't a prominent member of that conversation," says Merisotis. He predicts the private sector could actually become engaged in some national workforce development strategies that encourage studying high-demand subjects.

To read the study, visit www.ihep.org.

Distributin of Institute survey
Respondents by type of provider

Associations,
  labor unions,
  institutes           33%

Foundations and
  Scholarship funds    25%

Corporations           11.5%

Note: table made from bar graph.

Source: Institute Survey, 2004-05; 537 respondents