Jul 15, 2022 3 min read

The community foundations in Washington and Fayette counties are applauding a measure signed last week by Gov. Tom Wolf that includes a ban on scholarship displacement at public colleges and universities in the commonwealth.

What is scholarship displacement?

Here’s how it works: An ambitious high school student looking for ways to pay for their post-secondary education sets up a financial aid package at the institution they want to attend. They also receive a private scholarship from a nonprofit or charitable organization. The downside, though, is once they get that scholarship in hand, the college or university can reduce their financial aid package by that amount.

Financial aid officials at the colleges and universities that engage in the practice have argued that it is necessary to provide resources to many students. But scholarship displacement can make students and their families wonder why they went to all the work of applying for outside scholarships when that money is carved out of financial aid packages.

The Community Foundation of Fayette County (CFFC) was part of a statewide group calling for an end to scholarship displacement. With Wolf’s signature, the commonwealth became the fourth state to prohibit it, with Maryland leading the way in 2017.

Renee Couser, executive director of the CFFC, explained, “As a community foundation, our duty is to carry out our donors’ intent when they entrust us with their charitable giving. When we award a scholarship to a student on behalf of a donor, and the university then reduces that student’s financial aid package, that essentially eliminates the scholarship’s benefit to the student and defeats our donor’s purpose in awarding the scholarship.”

Scholarship displacement has also been a thorn in the side of the Washington County Community Foundation (WCCF). Betsie Trew, the president and CEO of the foundation, said she is pleased with the new law, but noted that it is limited to public colleges and universities. The majority of the scholarship money the WCCF dispenses goes to students who attend private institutions, such as Washington & Jefferson College, Waynesburg University and LaRoche University, she said, and the prohibition does not extend to these schools.

“It’s a step in the right direction, but it’s not everything,” Trew said.

She also explained that the foundation attaches letters stipulating that by accepting the contribution, the school will not reduce the financial aid package. It’s the same at the CCFC, according to Lee O’Neil, the foundation’s scholarship coordinator.

She explained that “we include specific wording in our award letters that request our scholarships to be stacked on top of a student’s financial aid, instead of being displaced.”

The California campus of Pennsylvania Western University does not reduce financial aid packages, said spokeswoman Wendy Mackall, except when required by federal law because the scholarship would put the student over the cost of attendance. It’s the same at Waynesburg University. Shari Payne, vice president for enrollment, explained, “In those cases, we first reduce loans and work study awards in the aid package.”

A spokesman for Washington & Jefferson College did not respond to a request for comment.

The legislation prohibiting scholarship displacement was authored by state Rep. Todd Polinchook, a Republican for Bucks County. He said, “Students and their parents deserve to lock in a student’s financial aid award from the very beginning despite additional scholarships. The rising price of colleges and universities makes this practice even more discouraging for our students who wish to seek higher education.”