Running head: Scholarship Education In Response To Rising Tuition 1

College Tuition Is Rising & Who Is Getting Financial Help

Mitchell T. Brown

Legal Studies Academy First Colonial High School

Scholarship Education In Response To Rising Tuition 2

Abstract

This paper discusses the issue of rising tuition costs and the increasing need for students to

obtain scholarships and financial aid. In particular, tuition has been rising at a rate at which

many families simply cannot afford or struggle to afford the complete cost of attendance.

Because there are so many people in today’s world with degree, employers are now changing

their requirement saying that they in fact do want people who do have a college education for

jobs that at one point in the past did not require a higher education. With skyrocketing amount of

students, colleges keep increasing their tuition because they know they can get away with it and

make their campus bigger and more aesthetic to bring in more students. This paper also brings

attention to the increasing amount of scholarship scams, in which students and their families

must be more aware about in order for them to prevent being a victim of fraud.
Scholarship Education In Response To Rising Tuition 3

Full title should go here and be centered but not bold

Paying for college. This is the biggest issue in any student’s mind intending to attend a

university for the next four or more years after graduating from high school. College tuition has

risen so much that unfortunately many gifted students are deterred from going to college because

of financial reasons. In many cases, students who excel in the classroom and extracurricular

activities simply cannot afford to pay thousands of dollars for an education that will take decades

to pay off. In today’s world students applying to universities are more worried about how much

debt they will rack up over their time attending said university instead of focusing on the college

at the top of their list. In addition there are many disadvantages and advantages for students of

different economic backgrounds, races, ethnicities, religions, etc. Many of these differences are

clear driving points or points of interest that in many cases affect who pays what amount of

money and many people are unaware of the many factors that go into college and college tuition,

away from the standard GPA and SAT/ ACT scores. Because of many students who are at a

disadvantage in the college process lean towards applying to scholarships and financial aid, but

many of the principles that affect the amount of student debt, and directly correlated with the

amount of scholarships and financial aid these students are obtaining. As a result of so many

students applying for these scholarships and financial aid opportunities, scammers have also

begun to realize what a opportunity these conditions could pan out for themselves, leading to

more and more scholarship and financial aid scams.

College Tuition

From 2000 to 2017, the average cost of a public four year university has jumped an

astronomical amount by almost 275%, going from around 3,000 dollars to almost 10,000
Scholarship Education In Response To Rising Tuition 4

dollars, which is almost double the rate of inflation (Fay 2018). From 2000 to 2018 inflation has

risen by 46.86%, which is substantially less than the rate of which college tuition is rising. These

huge costs of tuition can clearly be seen as a deterrent for aspiring college students, since most

high school students getting ready for college do not come from extremely wealthy households

where they can pay large sums of money in short periods of time. Most students pay for tuition

in chunks, and because of the very rapid and volatile rate at which college tuition is rising, it is

becoming increasingly difficult to calculate a ballpark amount of total amount of money that said

students will have the burden of paying off.

Many college students choose to take out loans to help them pay for their education

which in turn causes an enormous amount of student debt which will take close to a lifetime to

pay off. According to a Princeton review, as of 2016, college graduates have an average of

$37,172 of student debt(Fay 2018). In the United States, there are over 44 million Americans

drowning in over 1.4 trillion dollars of student debt is which is more than six percent of our total

national debt (Tran 2018). That may seem like a minor amount compared to the national debt,

but over six percent taken into account with the amount that the entire country of the United

States is in debt is be a huge red flag to aspiring college students.

A recent study from Generation Progress, which is the youth engagement branch of The

Center for American Progress, has a good representation and highlighted the areas throughout

the United States that struggle the most with student debt. They also detailed about how much

on average a person pays for their education out of their paychecks from separate financial

background such as people who reside in more affluent neighborhoods or parts of their city

compared to people who live in more middle class and also neighborhoods who are in poverty.
Scholarship Education In Response To Rising Tuition 5

It was found that most people allocate on average about or above six percent out of their

paycheck in order to pay off their student debt, while in comparison it was found that in larger

cities with younger and less affluent people in debt tend to pay more out of their pocket which

entail could easily surpass more than ten percent(Tran 2018). According to the Department of

Agriculture, the average person spend around 5.5 percent of their paycheck on groceries, which

is almost half the amount people in large cities spend out of their paycheck on their student debt.

Another factor, according to Generation Progress, was that the national

employment rate had a major effect on the amount of student debt students accumulated after

graduating from their university. There is a direct correlation between the level of employment

rate and the amount of student debt that graduates are dealing with. In areas where the

unemployment rate is high, there tends to be a significantly larger amount of student debt; while

in contrast areas where there are very low unemployment rates, the amount of debt is much

lower. Evidently the labor market, which is the ​the availability of employment and labor, in

terms of supply and demand, is closely related to current crisis in which nearly 44 million

Americans are currently struggling with. “It is quite evident that areas that have much higher

paying jobs coming straight out of college have a much easier time paying off their student

loans, debts, etc” (Tran 2018).

The rate of which college costs are rising, nearly eight percent, greatly exceeds

the rate of which salaries are rising by around three percent (Kurt 2018). Many graduates are

stuck in a hole where their salaries are not rising by a substantial rate, or in some cases any,

while their student debt continues to rise. Credentialism which is defined by The Oxford

Dictionary as, “the belief in or reliance on academic or other formal qualifications as the best
Scholarship Education In Response To Rising Tuition 6

measure of a person's intelligence or ability to do a particular job”, is also attributed to the

current student debt crisis. In many cases certain jobs that once required a form of higher

education and a degree may no longer require such standards creating a leeway for an even

higher amount of student debt. There are more and more people in today’s world choosing to

further their education and obtain a degree than any other time in history. “Finland, has a

remarkable 80% of young people attending a University, ” according to (Gatenby 2015). Experts

fear that academic credentials are slowly losing their value since so many people are obtaining

collegiate educations. In the same sense, this could be compared a more simple example such

as,if one child in a secondary school got a new pair of shoes that no one else had, those shoes

would hold a high standard and value, but as soon as everyone else in the school gets those same

shoes, then all of a sudden they don’t hold the same value.

From a result of many more American students pursuing a higher education and striving

towards a degree, many employers are expecting more and more. Many employers who were

once content with new employees only having a standard Bachelor's degree or high school

diploma, now have higher expectations for their employees to take the next step for their

education. For instance, in the past, some jobs did not require college level educations. Today

almost 37% of employers who at one point only required a high school diploma, now require a

higher level of education from an education and a degree. Since there are more people who do,

in fact , have a standard associates or bachelors degree, almost 27% of employers are actively

recruiting graduates who finished college with a master’s degree (Dishman 2016). Though the

value of a college degree almost seems like it is dropping, the gap between the yearly income
Scholarship Education In Response To Rising Tuition 7

between a person who only has a high school diploma and a person who has a standard college

degree or even a master’s degree is clearly getting bigger.

As a result from dramatically rising college tuition costs, current and aspiring college

students have become progressively more desperate. In order to compensate for the rising costs

and almost seemingly endless amounts of student debt mounting, students are in greater need of

financial help than any other time. It is safe to say that a large amount of college students are on

the hunt for scholarships that will help them pay for their education. Because of these historical

numbers, there are many scams that are directed towards vulnerable and desperate college

students. According to Mark Kantrowitz, whose statistics came from The National

Postsecondary Student Aid Study and analyses of various Fastweb databases, “ ​Of the students

enrolled full time at four-year colleges in the 2007-08 school year, only 0.3 percent were able to

obtain enough scholarship money to pay for their entire college tuition costs” (Singletary 2011).

“Every year thousands of families are defrauded while on the pursuit of acquiring scholarship

money, costing them collectively hundreds of thousands, if not millions of dollars” (FinAid

2018).

Different Types Of Scholarship Scams

One of the most basic types of scholarship scams are scholarships that never materialize.

The basic concept of this scholarship is basically that the hopeful college student or aspiring

college student sends in money up front in hopes of acquiring said scholarship, but virtually a

very miniscule amount, if any, scholarship money in return(FinAid 2018). When most people

encounter this kind of scam, they automatically think that they did not win said scholarship,

when in reality, the outcome is more complex. These scammers are profiting large amounts of
Scholarship Education In Response To Rising Tuition 8

money, and are basically keeping the applicants on a leash by leading them on by making them

think that they are legitimate. While in reality the scammers are really just there to make profit

off of desperate students who are greatly in need of financial help (FinAid 2018).

Scholarships for profit is one of the most deceiving scams because of that fact that it

looks so close in comparison with a legitimate scholarship. This type of scam can “typically

receive five thousand to ten thousand applicants which has application fees ranging from five to

thirty-five dollars” (FinAid 2018). This “scholarship” in some cases can afford to award a

student or two with a scholarship that really will not exceed one-thousand dollars. However, the

scammers have a much better pay off, pocketing a very generous amount of student’s money.

The advanced fee loan is another common type of scholarship scam. ​This scam seems

very appealing, especially towards students who are in need of financial assistance because the

scam offers the targeted student an unusually low-interest educational loan which requires the

student to pay a fee before the victim ever receive the said loan. When the victim does pay the

money to the scam artist, the promised loan ends up never coming to fruition resulting in the

student being essentially robbed. Legitimate education loans deduct the fees from the

disbursement check, and will never ask for a payment upfront in order to be considered for the

loan. “​Based off of the Federal Trade Commission's (FTC) Telemarketing Sales Rule, if a

loaner says that they will be able to grant someone a loan or any other kind of credit, they are not

allowed to ask nor receive payment until they have completed their services ” (Indiana

Department Of Financial Institutions). Hence meaning that no legitimate credit organization will

ask for a payment before the loan has been dealt. The easiest way to help recognize and prevent

the chances of being scammed is for the person intending on taking out a loan should ensure that
Scholarship Education In Response To Rising Tuition 9

they are attempting to obtain a loan from a bank or other legitimate recognized lender. Many of

these scams have some sort of money back guarantee, for if and when the student ends of not

receiving a scholarship, but put in place certain conditions that make it almost impossible for the

student to get their money back ​("Scholarship and Financial," n.d.). “Sometimes, these

companies ask for a student's checking account to confirm eligibility, then they proceed to debit

the account, essentially meaning that the student’s account is getting drained without the

student's consent behind their back. Other companies ask for a small monthly or weekly fee

and then ask for authorization to debit your checking account for as long as they can milk the

student’s account” ("Scholarship and Financial," n.d.).

The scholarship prize scam is another example of how scammers are taking advantage of

unsuspecting college students along with students who are preparing to start their collegiate

education. In this scam, the unsuspecting victim will receive a message from the scammer who

is posing to be a legitimate scholarship agency. The message will often times generally say that

the student was won some sort of prize or scholarship, and then the scam will proceed to ask for

a type of redemption fee (FinAid 2018). A common scheme that these scammers attempt is one

by which they send a check to the recipient of the scholarship the exceeds the amount and then

they ask for the recipient to send back a check to pay the difference. However, the catch of this

scam is that the original check that the scam is blatantly written off as a forgery, hence making it

invalid and unusable by the student. On the other hand the scammer is able to profit off of the

check that the student made out, which was intended to pay the difference of the overpayment

on the scholarship because the check the student wrote is not forgery, enabling the scammer to

run off with usable currency.

Scholarship Education In Response To Rising Tuition 10

Another kind of scam that students can commonly see, is the guaranteed scholarship

search service scam. Many times, these so called scholarship agencies will say that they will

guarantee the student that they will win a scholarship or they will get their money back after the

student pays a fee for their services. The companies will sometimes simply just pocket the

student’s money and disappear with no way for the student to get their money back or the

company will send a list of scholarships that match, however they make it very difficult for the

student to get a refund.

An example of this scam, from an article in the Los Angeles Times, in 1997 took place

in Washington and Baltimore metropolitan areas. The FTC said that the defendants sent out at

least 1,000 letters a day to students nationwide. The scam artists used fake business names in

order to sound more professional and legitimate like, "National Science Program" and the

"National Law Scholarship Program". These scammers stated that they were a kind of agency or

business that awarded selected students with financial help for their college education. The

targeted students and their families fell for this deception and sent in the $10 fee and in turn

received "very little or nothing" for their money, reported the FTC, and none of the students

received refunds despite the money-back guarantee ​("Beware the 'Guaranteed'," 1997).

How To Identify And Prevent Scholarship Scams

The first step in identifying scams and protecting yourself and your money is knowing

what to look for. The golden rule of finding and applying to scholarships that may match said

student is, “if it sounds too good to be true, it probably is” ("Avoiding Scholarship," n.d.).There

are certain red flags that all students and parents should be aware of and know when they come

across these scams while searching for scholarship opportunities. One of the most basic things
Scholarship Education In Response To Rising Tuition 11

that students and parents should be aware of is that : “No one should have to pay more than

postage to apply for a scholarship. Legitimate foundations rarely charge applicants and if they do

the fee is minimal” ("Avoiding Scholarship," n.d.). In order to be able to obtain scholarship

money, the student has to apply in order to be considered and in saying that, the student and

parents absolutely must be aware of how the application process actually works.

Common sense also plays a part in avoiding and protecting oneself from scholarship

scams, the student who is applying for said scholarship must know who they are doing business

with. Many of these fraudulent businesses and agencies will try to take advantage of applicants

and their families, and many will use the same sales pitches trying to draw in desperate students.

The FTC has published guidelines and frequent pitches that these fraudulent businesses use

including :

“ “​The scholarship is guaranteed or your money back.’ ‘You can't get this information anywhere

else.’ ‘I just need your credit card or bank account number to hold this scholarship.’ ‘We'll do

all the work, just pay a processing fee" ” ("Scholarship and Financial," n.d.).

Many schools and scholarship agencies offer students the opportunity to attend a

scholarship seminar which is intended to inform students and their families of how the process of

applying and winning scholarships works along with what kind of scholarships are available and

which ones students are eligible for. However many of these agencies and businesses can take

advantage of students who are new to this process and are learning how it all works, making it

absolutely essential that the student and their family knows that no one can 100% guarantee that

they will be awarded a scholarship. “The FTC says many legitimate companies advertise that

they can get students access to lists of scholarships in exchange for an advance fee, however
Scholarship Education In Response To Rising Tuition 12

legitimate companies never guarantee or promise scholarships or grants” ("Scholarship and

Financial," n.d.). “There are no application or processing fees. Under no circumstances should a

scholarship provider ask for your credit card or bank account information. If this happens, the

scholarship is a scam” ("Protecting Yourself," 2018).

The FTC has advised parents and students intending to apply for scholarships and

financial aid to follow some basic steps which will help identify and prevent the risk of falling

for a scam which include:

Take your time. Don't be rushed into paying at the seminar. Avoid high-pressure sales

pitches that require you to buy now or risk losing out on the opportunity. Solid

opportunities are not sold through nerve-racking tactics. Investigate the organization

you're considering paying for help. Talk to a guidance counselor or financial aid advisor

before spending your money. You may be able to get the same help for free. Be wary of

"success stories" or testimonials of extraordinary success – the seminar operation may

have paid "shills" to give glowing stories. Instead, ask for a list of at least three local

families who've used the services in the last year. Ask each if they're satisfied with the

products and services received. Be cautious about purchasing from seminar

representatives who are reluctant to answer questions or who give evasive answers to

your questions. Legitimate business people are more than willing to give you

information about their service. Ask how much money is charged for the service, the

services that will be performed and the company's refund policy. Get this information in
Scholarship Education In Response To Rising Tuition 13

writing. Keep in mind that you may never recoup the money you give to an unscrupulous

operator, despite stated refund policies ("Scholarship and Financial," n.d.).

Many aspiring college students and parents fail to realize that they must read and

understand the fine print in any money back guarantee when applying for scholarships and

financial aid. “If there is any kind of money back guarantee, there will be conditions. There is no

such thing as “no strings attached”. If there is a refund policy, get it in writing before you pay

anything” ("Protecting Yourself," 2018). In the area of searching for scholarships many sources

suggest that students should not rely on college scholarship search engines, but instead should

look for these opportunities on their own in order to help reduce the risk of being a victim of

fraud. Students should keep in mind that the people, businesses, or agencies who do provide

scholarships and financial aid do not want to keep their resources a secret, they want to provide

financial help to student attending college or those planning on going to college. There are

thousands of scholarships available for students to research and choose which best fit them and

give them the best chance of obtaining these financial resources. It can be tedious work while on

the hunt for scholarships, however there are no shortcuts . “You should never pay for results that

you can get for free. The last thing legitimate scholarship providers want is to keep their

scholarship a secret” ("9 Signs," 2011).

Students must realize that in the process of applying for scholarships, nothing is concrete

until they have been officially awarded with scholarship money or financial aid. “Nobody can or

will be able to guarantee that you’ll win said scholarship. There are false promises and will likely

result in something other than you obtaining money for school” (Hoyt, 2018). Applicants must
Scholarship Education In Response To Rising Tuition 14

be aware that there are many fraudulent businesses advertising anything they can trying to lure in

desperate college students. The agencies will try to pressure students into applying for their

scholarship but it is pivotal to remember that, “legitimate providers don’t pressure students into

applying. They ensure that students have time to work on their scholarship applications and

essays. If you ever feel pressured and feel under “now or never” scenario, the scholarship is

likely a scam” (Hoyt, 2018).

Relation To Law

Because of the massive amounts of money each year that is being poured into

universities, there are bound to be certain laws regulating these universities and lawsuits

affecting both the institution and the students who are paying the ever more mounting college

tuition.​ ​For instance there currently is a law in place, 20 U.S. Code § 1015a, which essentially

makes it necessary for universities to be more more transparent about the actual cost of which

students will have to pay over their educational career, or the cost of attendance. Cost of

attendance according to Cornell Law as, “the average annual cost of tuition and fees, room and

board, books, supplies, and transportation for an institution of higher education for a first-time,

full-time undergraduate student enrolled in the institution” ("20 U.S.," n.d.). In the past,

universities had made it very difficult for student and parents who are researching colleges to

accurately calculate the cost of attendance, however with this code in place it makes it easier for

these families to calculate if they will be able to afford said university. This code affects more

than just that fact that it makes it easier for families to calculate the cost of living, but it could as

a result help reduce the amount of seemingly endless amount of student debt that is plaguing the
Scholarship Education In Response To Rising Tuition 15

United States. With this code, families will be more aware of what they are getting themselves

into when they are deciding which university they will choose to go to. Before this code was put

into place many families were unaware of what they would truly have to pay in full, many of

times biting off more they can chew causing them to fall into crippling debt. Families got caught

having to pay dues that they cannot afford at a rate at which they can not keep up with, throwing

them down a hill into a snowball effect where their debt keeps building up.

Conclusion

All in all it is evident that because of new standards that businesses and employers

require are pushing students to levels than any other time in the past. Universities have seen a

substantial increase in the amount of students applying in the hopes of furthering their education

and making themselves more applicable in workplaces that require higher education. Because of

these higher amounts of students applying colleges have been steadily increasing their tuition

prices in order to keep making their universities more appealing and larger to attract more

students bringing in more money. These increases in prices are making the need for scholarships

and financial aid more and more essential for students to be able to pay for their education. With

more students applying for more scholarships and financial aid, scams have become more

frequent, making it essential for students to be educated when it come to the entirety of the

college process including the financial help.

Scholarship Education In Response To Rising Tuition 16

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