Maryland Becomes First State to Outlaw Scholarship Displacement by Public Colleges

"Again and again, college financial aid offices would frustrate Jan Wagner and Michele Waxman Johnson. As executives of Central Scholarship, a nonprofit in Owings Mills that provides scholarships and interest-free loans to Maryland students, they would award a student money and a university would reduce that student's financial aid by the same amount," The Baltimore Sun reports.
 
"The common practice provoked Wagner and Johnson, the organization's vice president, into a two-year campaign to stop it. Their effort led to a new law that took effect on July 1, making Maryland the first state to ban scholarship displacement by public colleges. ...
 
Maryland's new law now limits the conditions under which institutions may decrease financial aid, allowing reductions when a student's aid exceeds the cost of college or with permission from a scholarship provider. ...
 
The longstanding practice of scholarship displacement has exasperated nonprofits and students across the country. University officials say it's intended to redistribute limited financial aid to the students who need it most. Scholarship recipients say it essentially punishes them for having the wherewithal to find other sources of financial aid. ...
 
The National Association of Student Financial Aid Administrators hasn't taken a position on scholarship displacement. But Karen McCarthy, its director of policy analysis, said she's heard from universities who say the practice can redistribute aid to low-income students."
 
NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 7/5/2017

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