State ban on scholarship displacement will benefit local students

You may have never heard of scholarship displacement, but the Elk County Community Foundation, the McKean County Community Foundation, and our local students have dealt with it for many years. This occurs when colleges and universities reduce a student’s financial aid package by subtracting the scholarship amount when the student receives a private scholarship, such as one from the Community Foundation.

On Friday July 8, Governor Tom Wolf signed into law HB1642, a sprawling public school system bill that includes a ban on scholarship displacement at public colleges and universities. This makes Pennsylvania the fourth state in the country to eliminate the practice of colleges and universities reducing a student’s financial aid package when the student receives a private scholarship.

The ban went into effect immediately and will positively affect awards for this academic year. The fact that a new law or regulation was successful in the first year it was proposed is very unusual. However, once Community Foundations and other scholarship providers showed the legislature what was happening and what scholarship displacement was, representatives were eager to address it right away.

PACFA, the Pennsylvania Community Foundation Association, joined a statewide coalition of scholarship providers to initiate the call for elimination of scholarship displacement in 2018. Paula Fritz Eddy, Community Foundation Executive Director, and PACFA Board Member, explains, “As a community foundation, our duty is to carry out our donors’ intent. When we award a scholarship to a student on behalf of a donor, and the university then reduces that student’s financial aid package, which essentially eliminates the scholarship’s benefit to the student, and defeats our donor’s purpose in awarding the scholarship. We are pleased with the passage of HB1642.”

With over 170 scholarships available from our local Community Foundations to area students in 2023, this bill will make an immediate positive impact within our region. Students can apply now through March 7 for these scholarships by visiting the Elk County Community Foundation and McKean County Community Foundation websites.

The Community Foundation of the Northern Alleghenies is the parent company of the McKean County Community Foundation and the Elk County Community Foundation. For more information, please contact the Community Foundation at 824-834-2125 or 844-238-2289.