We talk about scholarships like they're this great equalizer in higher education that dishes out free money to the deserving. It’s a noble idea, apart from the fact that the data tells a different story, one where students from families making over $106,000 annually get private scholarships at nearly 13 percent, compared to about 9 percent for those whose families earn less than $30,000. That's not a minor gap. That's a system working exactly as it wasn't designed to work, funneling resources upward to families that need them least while lower-income students scramble for scraps.
The Information Divide Starts in High School
Wealthy students know about scholarships before anyone else does. Sallie Mae surveys indicate that 80% of families use scholarships, but lower-income households under $50,000 cite lack of awareness as a top barrier to applying. That knowledge gap isn't an accident. It's built into the structure of how we fund schools and distribute college counselors.
Private schools and well-funded suburban districts have counselors with manageable caseloads who can actually spend time helping students find scholarship opportunities. Low-income and urban schools face high student-counselor ratios, leaving counselors overburdened and limiting financial aid counseling.
Parents who went to college themselves navigate this system better because they've seen it before. First-generation college students secure private scholarships at rates around 7-10%, compared to 12-15% for those with at least one college-educated parent. We inherit advantages through information, and scholarship access is no different.
Merit Aid Has Become a Business Strategy
Here's the uncomfortable truth about "merit" scholarships at struggling public universities: they're not really about merit anymore. They're tuition discounts dressed up as awards, designed to lure higher-paying students away from competitors.
From 2001 to 2017, the number of public institutions spending more than $10 million yearly on aid for relatively wealthy students more than tripled, from 29 to 89. Colleges need full-paying students to subsidize everyone else, so they offer "scholarships" to attract families who can afford most of the tuition anyway.
The System Ignores Family Wealth
Financial aid formulas have a massive blind spot in that they don't count home equity or retirement savings when determining what families can afford. Because these major forms of wealth are largely shielded in current need-analysis formulas, families with significant assets can sometimes qualify for similar or greater levels of grant aid than families with comparable or lower ability to pay but few assets.
This isn't a small technical issue. It's a fundamental design flaw that perpetuates inequality through a system supposedly built to reduce it.
Private School Students Have a Built-In Advantage
The statistics on this one are stark. 10% of students that attend a private school win an average scholarship at a private college worth $2,631. Compare that to just 3% of public school students. Yes, there are far more public school students overall, which affects the percentages, but that doesn't explain the entire gap.
Private schools often have dedicated college counseling offices, connections to scholarship committees, and alumni networks that share information about funding opportunities. They teach students how to present themselves on applications, how to write compelling essays, how to position their achievements. Public school students figure this out on their own, if they figure it out at all.
Middle-Income Families Somehow Win More Than the Poor
According to ThinkImpact data, middle-income students won 13.8% of scholarships vs. 10.6% for low-income households.
Middle-income students occupy this sweet spot where they have enough resources to compete effectively for scholarships while still qualifying as needy enough to deserve them. They're more likely to attend schools with decent counseling. Their parents probably went to college. They're less likely to be working full-time jobs that cut into application time.
Lower-income students are competing with one hand tied behind their backs, dealing with food insecurity, housing instability, and family responsibilities that middle-class teenagers don't face. Then we act surprised when they don't win as many scholarships. The system measures preparation and polish, not potential or need.
