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A graduation cap with the word "SCHOLARSHIP" written on it atop a spread of $100 bills.

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As colleges and universities across the country come to terms with the U.S. Supreme Court’s recent decision to restrict race-conscious admission policies, the broader implications of the ruling are beginning to emerge. Case in point: states and institutions are now moving to eliminate race-based scholarship programs and other financial aid. As alarming as that sounds, it turns out that prohibiting race-based financial aid will likely not have much of an impact. That’s because colleges direct so few scholarships, grants and other forms of aid toward students of color in the first place.

In fact, race-conscious policies—from admissions to financial aid—have hardly moved the needle in the decades since affirmative action was first adopted by colleges and universities. While there are certainly higher education leaders, researchers and policy makers who have made valiant efforts to change a broken system, Black and Hispanic students are more underrepresented at top colleges than they were in 1980. It might be easy to paint challenges to affirmative action policies in a villainous light, but the hard truth is that there are few good guys here.

Institutions have had half a century to find lasting, systemic ways to create greater equity in higher education. At the heart of the failure is a system of financial aid that has directly fueled inequity in college access. As the country reimagines how to best support students of color in the wake of the Supreme Court’s ruling, we cannot forget the critical role scholarship opportunities and other kinds of financial aid play in both promoting and impeding equity in higher education.

Research shows scholarships have a substantial impact on college completion for nonwhite students, Pell Grant–eligible students and first-generation learners. Yet over the past several decades colleges have expanded their “merit aid” pools, diverting large shares of institutional financial aid resources to students without financial need. These choices directly harm students of color, a higher percentage of whom qualify for Pell Grants and stand to benefit more from institutional scholarships.

As a provider of private college scholarships, we recently dug into our own numbers and found that a small fraction of scholarships delivered through Scholarship America are awarded to minority students with high financial need. It was a disturbing revelation that unfortunately mirrors the country’s approach to scholarships on the whole.

Today, colleges still give far too much financial support to wealthy students, rather than to the students who need the financial help the most. Of the billions of dollars in aid colleges award to students each year, a full quarter of annual grant money at private colleges and universities is awarded based on merit, not family income. At some public institutions, the discrepancy is even more stark. One study found that $1 out of every $3 that public research universities and land-grant institutions spend on financial aid is awarded to students without financial need.

It’s increasingly clear that our current system for distributing financial aid and scholarships—in which institutions control how and where aid is delivered—is not working. We need a student-centric approach that gets funding directly into the hands of underserved students. And that means rethinking and expanding the role philanthropists, nonprofits and other partners play in delivering aid to those who need it most.

Fortunately, we know what success can look like. Detroit Regional Dollars for Scholars, a program we’ve been proud to support for nearly 30 years, helps students complete college at rates more than double the national average for students from low-income high schools by providing scholarship funding and holistic support directly to students themselves. By following the lead of organizations that focus specifically on the students who stand to gain the most from scholarship funding, funders of all kinds will see their investment in closing the country’s college access gap begin to pay off.

That higher education has so far struggled to sufficiently widen access and completion for students of color is not simply the result of outside forces like the recent Supreme Court decision. Neither is it just the result of inaction or apathy. It is the consequence of specific choices colleges and universities continue to make around recruitment, admissions and financial aid. It is past time to reimagine the way we support students of color as they make their way to and through college.

Mike Nylund is president and CEO of Scholarship America.

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