The state of Maryland passed a bill on July 1 that bans scholarship displacement at public colleges, making it the first state in the country to do so.
Many are unaware of the practice of scholarship displacement — when an institution reduces the financial aid award of a student by the same amount of their private scholarship to redistribute to other students in need.
“Scholarship displacement is yet one more example of colleges’ nefarious financial aid practices that make it impossible for families to understand how much they will actually pay for college,” Kerry Traylor, CEO and founder of College Strategy Experts in California told Diverse via email. “It’s an inexcusable practice, quite frankly, and I’m so glad that a progressive state like Maryland has banned it.”
The new law prevents public colleges in the state of Maryland from cutting financial aid from students when they receive a private scholarship. Instead, it allows Maryland public colleges to reduce their aid packages through permission from the scholarship provider.
Executives of Central Scholarship, a nonprofit that provides scholarships and interest-free loans for nearly 350 students pursuing a postsecondary education, advocated for nearly two years for Senate Bill 337 to pass.
“Last year was an education process, helping our elected officials understand the issue and why it was important for them to address it,” said Jan Wagner, president of Central Scholarship, in a phone interview.
Wagner and Vice-President Michele Johnson partnered with University System of Maryland, with its 12 member institutions, to craft the legislation that eventually passed.
