A College Scholarship Scare

Here’s another victim of the stubborn recession:  College scholarships.

A recent article in The New York Times concluded that students hoping to win college scholarships are going to experience a much harder time. The newspaper cites dwindling support from corporations, states and philanthropists as the culprits.

While this is unwelcome news, I’d suggest that the reality is not as spooky as the article suggests. Why?

The largest source of financial aid remains the federal government and those programs are not endangered. Another huge source of scholarship money is from the schools themselves. As I mentioned in my post yesterday, private colleges INCREASED their aid for the 2009-2010 school year by 9%.

Much of the focus on the newspaper article was on diminishing private scholarships, but as I’ve mentioned in many previous posts, these college scholarships represents a teeny tiny sliver of the free cash available for college students.

Here’s the bottom line:  the news isn’t quite as scary at The New York Times would have you believe.

Learn how to shrink the cost of college by reading my book, The College Solution, and visiting my other college blog at CBSMoneyWatch.com. Lynn O’Shaughnessy

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