Hidden Costs
Fighting back when your scholarship (and school) works against you
By Kate Morgan

Just before the start of her final year of college, Zaniya Lewis got a scholarship from the Taco Bell Foundation. The philanthropic arm of the restaurant chain gives out millions each year, and the $25,000 Lewis received meant she could finish out her undergraduate degree at The George Washington University with no debt.   

But after notifying the university about her achievement, Lewis got a bill. “They told me they were going to cut about half of my institutional scholarship, and they were eliminating my work study, and therefore I owed over $15,000 out of pocket,” she says. “They basically said I could get a private loan or I could drop out of college.” 

Political maneuvering and issues with the law’s wording has allowed some N.J. schools to keep practicing scholarship displacement.

Zaniya Lewis speaks at a YESSHECANCAMPAIGN event

Lewis, now 25, had become the victim of something called scholarship displacement. In its simplest terms, that’s when getting a private scholarship results in a reduction of other financial aid, especially institutional scholarships given by the school itself. It can create a gap that means students who thought scholarships would cover their bill suddenly have to take out loans or pay partial tuition out of pocket. It’s a practice most students (and parents) have never even heard of, but it’s widespread. A survey by the National Scholarship Providers Association found that roughly 50 percent of schools admitted to reducing institutional grants and scholarships after students get private scholarships. 

“This is an issue nationwide,” says Lewis. “It was like a kept secret that only people in the scholarship world were really talking about. So I was like, this is something we need to fight.”

Lewis already had a platform from which to launch the battle. She’s the founder of a national nonprofit called the YesSheCanCampaign, an organization that empowers girls and young women to pursue and complete their education while overcoming adversity, and makes things like internships and scholarships accessible to students who don’t have a support system at home. The YesShe-CanCampaign has been recognized with national and international awards, including The Diana Award, named for the UK’s late princess, which is one of the highest accolades a young person can receive for social action. In 2020, Lewis’ achievements earned her a place among SJ Mag’s Women of Excellence.

Once she realized the massive scale of scholarship displacement, Lewis knew she’d have to fight it on multiple fronts. She began connecting with other students who’d been victims of the practice, and meeting with major donors and scholarship providers to explain the issue. She also got to work on the political front, meeting with legislators to try to pass laws against scholarship displacement at the state and federal level. 

Lewis established DISSCHOLARED, an offshoot of the YesSheCan Campaign, to help spread awareness and push for change. “We focus on advocacy,” she says. “So we actually talk about our stories and we go to different government agencies and officials, and tell them about what happened to us in hopes that they may create some legislation or something to ban it.”

There are 5 states, explains Lewis, that have laws about scholarship displacement on the books. In Maryland and Pennsylvania, it’s illegal at public universities. The law in Washington covers both public and private schools, but not community colleges or trade schools. In California, it’s illegal for schools to practice scholarship displacement on students who receive Pell Grants or receive aid under the California Dream Act. And in New Jersey, a 2021 law banned scholarship displacement at public schools. Unfortunately, Lewis says, just because the laws exist doesn’t mean they’re always followed. 

“After the New Jersey law was implemented, I got a call about a student at Rutgers University who’d been a victim of the practice,” she says. “We were able to help her learn about the law, and get her money back, but when State Senator Troy Singleton, who’d introduced the bill, contacted the Department of Education, we found out the state hadn’t told the schools about the law.”

Political maneuvering and issues with the law’s wording, Lewis says, has allowed some N.J. schools to keep practicing scholarship displacement. In response, she says, “Senator Singleton introduced a bill in February to expand the ban throughout the state.” 

In 2021, N.J. Congressman Andy Kim introduced a bill at the federal level that would address scholarship displacement. Called the Helping Students Plan for College Act, it’s been seemingly stalled in the House Committee on Education and Labor, Lewis says. 

In the meantime, she adds, “what these institutions get away with is horrible. A lot of them aren’t transparent about these financial aid policies. If it’s even on a website, it’s hidden in a PDF from 10 years ago.” 

That lack of transparency often creates even more struggles for students trying to financially plan for college. “At least be upfront, so when students are making decisions, they can actually know what’s available to them,” Lewis says. “Instead, students sign everything and put deposits in, and then find out they owe thousands of dollars. They can’t even plan how to pay for college, because once they secure funding, the schools pull it back somewhere else. They’re not on the students’ side.” 

Lewis and other DISSCHOLARED representatives have begun trying to change how scholarships are handled between students and the donors themselves. “A lot of the companies giving out scholarships don’t know this is happening,” she says. “There are some corporations, such as the NBA, that give out billions of dollars in scholarship money. They didn’t know about this, and once we told them about it, they changed their policies to give scholarships directly to the student, rather than forcing them to notify their school.” 

Lewis also met with the Taco Bell Foundation, who’d provided her scholarship that started it all. “Ever since it happened to me, they changed their policy, too.” 

Not every company is so eager to change. Lewis says DISSCHOLARED filed a complaint with the Federal Trade Commission against a scholarship disbursement company that acts as a middleman between donors and universities. They’ve long been aware of scholarship displacement, she says, and they’ve profited from it. 

“There are also issues with private loan companies,” she says. “They’re buying up a lot of these scholarship programs. Like [scholarship search app] Scholly just got bought by Sallie Mae. These private loan companies are buying these apps and websites so they can redirect students to their loans once they become victims of scholarship displacement. I didn’t know it was a big deal like this until I really started paying attention and started seeing how all the dots are connected.” 

One of DISSCHOLARED’s major aims is education. Lewis and her colleagues have designed workshops and trainings for students and families to teach them about scholarship displacement, and help them understand that, while the world of college financial aid is complex, there are ways to avoid being victimized.  

“Every time I see a new scholarship program come out, I kind of cringe because I’m like, you are just playing into this problem and not actually focusing on systemic change when it comes to the policies and practices that impact scholarship programs.” 

When Lewis graduates from Rutgers University – Camden’s law school this spring, she hopes to continue helping and representing students who’ve been impacted by scholarship displacement. To provide immediate help, “we just opened our own emergency fund,” she says. “So now we’re able to provide some emergency funds to students who were victims of scholarships displacement to help them at least be able to get across the finish line.”  

October 2023
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