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Moen Bill to Address Scholarship Displacement at NJ Colleges Clears Assembly Panel

(TRENTON) – With the goal to ensure college students are not penalized in their institutional financial aid package for earning scholarships from private organizations, legislation sponsored by Assemblyman Bill Moen was approved Monday by the Assembly Higher Education Committee.

The measure (A-3789) would address the practice of ‘scholarship displacement,’ in which a higher education institution reduces the amount of financial aid awarded by the college or university to a student if they receive a scholarship from a private entity, such as a business or nonprofit.

Under this legislation, higher education institutions would only be able to reduce a student’s financial aid as a result of a scholarship award under certain circumstances. Such instances would include if a student’s aid from all sources exceeds their need; an institution receives approval from the private entity which awarded the scholarship; or to comply with financial restrictions of an athletic organization.

Assemblyman Moen (D-Camden, Gloucester) released the following statement on the bill:

“With the costs of college on the rise, many students turn to financial aid resources to help them pursue a higher education. Many work hard to earn private scholarships to supplement the financial aid they receive from their college, only to see schools reduce their previously awarded aid after securing a scholarship.

          “We understand colleges want to allocate resources to help as many students as possible. However, students who seek out private scholarships are doing so for a reason: their financial aid package isn’t enough to cover the cost of school.

          “This bill will ensure students are not penalized for earning private scholarships, allowing institutions to reduce aid only under certain circumstances to minimize financial harm to students.”