On this episode we discuss the importance of debunking 5 big scholarship myths that tend to circulate among parents every year, and need to be put to rest so they can get to the job of the finding the money their students need to pay for college.
Our main guest today is Gyan Devi (pronounced Ghee-YAHN, rhymes with “neon”, and DAY-vee)
, the author of How to Find Scholarship Opportunities Online and Scholarship Opportunities for Women. Gyan also keeps a blog at ScholarshipOpportunities.org Gyan helps to debunk the five biggest myths parents have about scholarships and financial aid, that often are the largest impediments mentally to people actually applying for scholarships in the first place.
In addition, we talk about the myth involving the cost of attending public school over private colleges. Abigail Seldin of College Abacus (@CollegeAbacus) sets us straight on what she found when comparing several private and state colleges when it comes to affordability. In addition, we answer a listeners question about her wish to attend school at SUNY Buffalo or Long Island University.
Listen to the episode: [audio https://s3-us-west-1.amazonaws.com/cmmwordpress/Podcasts/episode14-12.mp3]
Download The Episode: Ep14-12 March 20, 2014
Jose “JR” Vazquez: It’s March 20th 2014 and this is episode twelve of the College Money Man Podcast.
You know, in the united states, the methods by which we pay for a college-bound teens education is plagued by a persistent and pernicious mythology that is harmful to helping parents find the money they need to fund a students education. And that’s were my next guest comes into play, Gyan Devi
Joining us via Skype is Gyan Devi (pronounced “Ghee-YAHN” rhymes with “neon” and Devi “DAY-vee”). Thanks for joining us Gyan.
- Students/Parents think scholarships are restricted to minority students
- This is a touchy subject for many students, but here’s the deal – unless a scholarship is specifically designated to support a certain demographic, race isn’t a factor for applying.
- Most scholarship applications do not require you to disclose your ethnicity, so for the most part judges will have no idea what your (or other applicants’) race is.
- If a scholarship does ask for your ethnicity it’s not for screening purposes – many organizations use this information to get a better sense of what communities they are serving or to share their insights for annual reports (many non-profits are required by the government to provide information on the demographics they are providing services for).
- So here’s the numbers: White students win more scholarships than minority students.
- Minority students are less likely to win scholarships than white students enrolled full-time at 4-year colleges.
- White students represent 61.8% of the college population, but win 71.5% of the scholarships.
- Minority students represent 38.2% of college population, but win only 28.5% of the scholarships.
- The odds of winning a scholarship are 14.4% for White students compared with 11.2% for minority students.
- The odds of winning a scholarship are 11.4% for Black or African-American students, 9.1% for Hispanic or Latino students, and 10.5% for Asian students.
- While the majority of states do offer ethnicity-specific scholarships, these have actually been outlawed in five states—Arkansas, Oklahoma, New Mexico, Louisiana and Texas.
- The Distribution of Grants and Scholarships by Race (Mark Kantrowitz, September 2011) at http://www.finaid.org/scholarships/20110902racescholarships.pdf
- Students/Parents think only low-income students win scholarships
- Low income is defined as having a family adjusted gross income (AGI) less than $50,000. Middle income is defined as having a family AGI of $50,000 to $100,000. Upper income is defined as having a family AGI of $100,000 or more.
- Middle-income students are more likely to win private scholarships than low-income or upper-income students.
- Of full-time students enrolled at 4-year colleges, 13.8% of middle-income students won scholarships, compared with 10.6% of low-income students and 10.8% of upper-income students.
- Most private scholarships are not based on financial need.
- Only students with the best grades get scholarships
- Students with better grades are more likely to win scholarships, but B and C students do win some.
- Slightly more than half (54.4%) of scholarships are won by students with grades in the A- to A range, a 3.5 to 4.0 grade point average (GPA) on a 4.0 scale.
- But almost a third (30.0%) are won by students with a B average (3.0 to 3.4 GPA),
- 6.2% by students with a C average (2.0 to 2.4 GPA) and
- 1.3% by students with less than a 2.0 GPA.
- The odds of winning a scholarship for students with an A average are more than double the odds for students with Bs and Cs
- Students with above-average SAT and ACT test scores are twice as likely to win scholarships as students with below average test scores.
- Two-thirds of private scholarships are won by students with above-average SAT and ACT test scores.
- But you can still win scholarships even if your grades aren’t stellar. Less than 10% of private scholarships are based on academic performance.
- There are tons of scholarships that don’t even look at course grades, or even require you to submit them in your application.
- If you’re the type of student that be judged solely by a transcript, then look for merit-based scholarships.
- These types of scholarships are often related to a student’s ability to excel at non-academic pursuits like art, sports, or volunteer work. Most of the time they require applicants to submit essays, videos, or portfolios showcasing their unique abilities, not their test-taking skills.
- Every scholarship sponsor is looking for the students who best match their criteria. Instead of academic talent, they might be looking for artistic talent or athletic talent or even something a bit unusual.
- Majors also matter. Students studying STEM fields (science, technology, engineering, and mathematics) are much more likely to win scholarships.
- Of students enrolled full-time at 4-year colleges, 17.0% of students majoring in STEM win scholarships compared with 12.1% of students majoring in non-STEM fields.
- More than a third of private scholarships are won by students studying STEM fields.
- Students believe scholarships are too competitive
- Start Local (Less competition)
- Clubs like Rotary, Masons, Elks Club, VFW, Chamber of Commerce
- Activities like Fish & Game Clubs, Ski Clubs, Arts organizations
- Employers (parents and relatives) — large and small
- Unions — Firefighters, Law Enforcement, Teachers, Teamsters
- Local banks and credit unions
- Local Churches, Temples, Mosques, Religious or Spiritual Organizations
- Community Foundations (search by county where you live or will attend)
- Professional or Industry Organizations — Anything in your major or that family members are affiliated with
- Then look Nationally, using scholarship search engines, web portals, and ebooks
- Students think obtaining scholarships is too much work
- After the first few scholarship applications, the amount of work for each additional application is reduced, because students can reuse and adapt previous essays and personal statements
- Required Documents Are Reusable — resume, transcript, test scores, letters of recommendation
- Scan and copy
- Once you’ve applied for one scholarship, it’s fairly easy to modify the application materials and apply for hundreds of scholarships. I call this the “Cookie Cutter Approach”
- Investing time in locating and applying for scholarships will earn you more than 4 years of a summer job or part-time job.
Are you surprised? Let’s take a quick look at the numbers:
- The average student loan debt for the class of 2012 was $29,400
- So, what pays off the average student debt the fastest?
- Applying for Scholarships while in school? Working part-time in college? Or paying off loans after graduation?
- Part-Time Job
- Average UG Salary (includes Work Study): $10/hour
- Part-time = 4 hours/day or 80 hours a month
- Effort to pay off $29,400 = 2,940 hours
- Doesn’t take into account taxes or social security withholdings; so you’ll actually have to work more hours
- Full-Time Job After Graduation
- Average Starting Salary of College Graduate = $22/Hour or $20/Hour after taxes
- Full Time = 8 hours/day or 160 hours a month
- Effort to pay off $29,400 = 1,470 hours (about 9 months!) and that’s if you put your ENTIRE paycheck toward your student loans!
- Average Scholarship Award = $2,000
- Time to Apply for a Scholarship:
- Application: 1.5 hours
- 500-word Essay: 5 hours
- Other Documents: 1/2 hour
- Interview: 1 hour (not always required)
- 1 Scholarship = 8 Hours
- On average, it takes roughly 10 scholarship applications to win 1 scholarship award
- Remember the “cookie cutter approach?” You can reuse about 70% of scholarship materials to apply for future scholarships. So…
- Applying to 10 scholarships will take 70% less time = about 30 Hours
- Effort to pay off $29,400 = Winning 15 average-sized scholarships = 450 Hours
- Hourly wage earned: $66/hour or $528/day
- The amount of work is minimal compared with the potential rewards
- Sure beats $10 or $20 an hour working at a job.
- I’ve got a great infographic that shows this data on our blog. You can check it out at http://www.scholarshipopportunity.org
- Most importantly, winning scholarships is easier than repaying student loans. Every dollar you win in scholarships is a dollar less you will need to borrow. Every dollar you borrow will cost you about two dollars by the time you’ve repaid the debt.
So this week we tackle a listeners email about the schools they are considering attending in New York.
Good morning, my name is Soleil and I am planning to go out of state for college. ( I’m from Los Angeles, CA)
I got into suny buffalo state for $31,000 a year with the following financial aid:
- $6000 scholarship
- $3067 work study
- And the rest of the $25k in loans
I also got into Long Island university for $52k a year which is just too much. In loans $32k every year, with no in state fees since it’s private
What do you think about buffalo state? It’s way more affordable and I was planning to establish NY residency after so I can pay in state fees
Please help I don’t have a lot of time to decide
Jose “JR” Vazquez: Thank you Soleil for your question. This is actually a difficult one to address because it involves motivations that aren’t revealed in your question. However, I would ask yourself, “Why would I want to attend a mid level state university offering little in the way of aid on the other side of the US in the first place?” I don’t know about your personal situation, whether it involves a spouse, partner, or parent that is moving there or lives in New York now. However, I would tell my son, as I have told my sisters before a few very clear things about attending out of state:
1) Never pay full price for any school: There are always outstanding little college gems out there that are looking for talented, bright, motivated, and unique people to attend their school, and are often willing to pay for the privilege. Without heavy tuition discounting/merit aid from a school as a part of the admissions offer, I wouldn’t even consider it.
2) Never attend a state college out of state public college with incentives: State colleges are supposed to be cheaper, but not when you are out of state.