One million dollars. A student will earn that much more in life with a four-year college degree as opposed to just a high school diploma. That’s according to a recent study from Georgetown University, which offers just such a degree for a grand total of $200,000 in tuition, room and board paid over four years.
Unless there are rich parents in the picture (or maybe a rich uncle), a student will likely need financial aid to pay all that. And when it comes to financial aid, there are basically two kinds: the kind you pay back (i.e. student loans) and the kind you want.
You want a scholarship.
No wonder a bevy of edtech companies are purporting to make it easier for you to find one. “Millions of scholarships,” they claim, are going unused.
But are they really helping? Put aside the Catch-22 inherent in a company successfully directing millions of applicants to “unused” scholarships. Here’s a bigger problem: It turns out the vast bulk of scholarship money — 93 percent of roughly $50 billion in grants — comes from the colleges themselves, not from private “outside” sources.
And most of those private so-called scholarships amount to tiny, small-dollar prizes — $100 here, $500 there. If you win any of this money and actually need it to help pay a $20,000 tuition bill, your college is likely to deduct any outside scholarship — dollar for dollar — from the institutional aid you receive.
It gets worse.
Spend a few hours checking out scholarships on one of the national databases and you’ll discover that many of them — especially the ones that are “easy to win” — have a sneaky hidden agenda.
Too many players in this space confuse product with promotion.
Think: sweepstakes. Publishers Clearing House — like its precursor American Family Publishers, made famous by Johnny Carson’s sidekick Ed McMahon — does not just give away money for the heck of it. They’re selling magazines. For each prize they award they snag untold thousands of leads — prospective customers willingly giving up personal contact information in exchange for a vanishingly small chance of winning.
Most scholarships work the same way.
A typical private scholarship — the kind made easy to find by a typical edtech startup — features language that sounds like a sweepstakes (“Enter to Win”). The application reads like a “lead gen” form for a bank, an app or even another edtech company.
This is not edtech. This is Ed McMahon.
And it’s not just for corporate marketers. Many scholarships offered by colleges are also best understood as a form of advertising. Colleges use scholarships to maximize leads — politely known by elite schools as “prospective students” — and conversion. In other words, “scholarship” is the Ivory Tower way of saying “SALE” and making it (and you) feel special. Academics have run the numbers on this practice and it appears tuition discounts of up to 13 percent can actually increase revenues, just as Black Friday does for Walmart.
So is there is an edtech way to make scholarships work for students, not just colleges and corporations? A handful of startups are taking up the challenge:
- Scholarship Owl offers a common application for hundreds of scholarships, making a tedious process a little bit easier.
- DoSomething.org, a nonprofit with an elegant mobile app, puts the sweepstakes dynamic to good use by offering scholarships to inspire teenagers to take social action.
- Raise.me enables certain colleges and universities to offer special “micro” scholarships for achievements early in a student’s high school career.
These models laudably go beyond mere listings of small scholarships and marketing contests, which you anyway can find for free on various websites, including this one.
Still, edtech has yet to solve the scholarship challenge. Too many players in this space confuse product with promotion. Perhaps when someone figures out how to combine big data and shoe leather to help students discover and apply for hidden gems, like the local Kiwanis Club grant that doesn’t make it to a national database, scholarships will finally alter the return on investment students enjoy from a college degree.
In the meantime, you might as well play the sweepstakes.