Legislation Takes Effect Banning Private Scholarship Award Displacement

With a two-year effort by Central Scholarship, a nonprofit that provides scholarships and interest-free loans to students, Maryland has become the first state to ban the practice of scholarship award displacement at public four-year colleges and universities. HB 266 / SB 327 (Ch. 331 and 332, Acts of 2017), which took effect July 1, 2017, would authorize public colleges and universities to reduce institutional gift aid if a student’s total gift aid exceeds financial need, but prohibit the reduction of institutional gift aid by the amount of a private scholarship award if financial need is not met. A recent article in the Baltimore Sun provides greater detail.

From the organization’s website, Central Scholarship enables students in Maryland to pursue education or training after high school through scholarship programs and no interest loans that fund the gap after all other financial aid has been awarded. Established in 1924 and with over $1 million in college scholarships and grants awarded annually, we screen student applications according to criteria established by our donors, who invest in students and believe in the pursuit of higher education without crippling debt.

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