Do Scholarships Ever Go Unclaimed?
Scholarship scams often promote the unclaimed aid myth, which claims that millions or billions of dollars of scholarships go unclaimed each year.
The original version of the unclaimed aid myth said that $6.6 billion in scholarships went unclaimed.
This myth was based on a 1976-77 study by the National Institute of Work and Learning. The study estimated that employees used only $300 to $400 million of the estimated $7 billion in employer-paid tuition assistance was available each year. Subtract one figure from the other and you get the $6.6 billion in unclaimed aid, which was subsequently misreported as unclaimed scholarships.
Thus, this myth is 40 years old and has nothing to do with scholarships. It is also based on an estimate and not an actual list of unclaimed funding sources.
Nobody has a list of unclaimed scholarships because there are none. Most scholarships receive many more applications than available funds. With some scholarships, there may be as many as 400 applications for each scholarship award.
A handful of scholarships occasionally go unclaimed because they can’t be claimed, due to very restrictive scholarship selection criteria.
- The Zolp Scholarship is for a student at Loyola University of Chicago who was born with a last name of Zolp. The name Zolp must appear on the student’s birth certificate and christening certificate. Some years there are no eligible applicants. You cannot change your name to qualify.
- The Malcolm R. Stacey Memorial Scholarship at the University of California at San Diego (UCSD) was available only to Jewish orphans who were graduate students majoring in aeronautical engineering. Very few students ever qualified for this scholarship. UCSD obtained a court order in 1987 that provided them with more flexibility in awarding the scholarship when there were no eligible students.
An estimated 2 million students each year do not file the Free Application for Federal Student Aid (FAFSA), but would have qualified for a Federal Pell Grant. More than a million would have qualified for the maximum Pell Grant. To get this money, if you are eligible, all you need to do is file the FAFSA.
Similarly, many eligible families do not claim the American Opportunity Tax Credit (AOTC) or Lifetime Learning Tax Credit (LLTC) on their federal income tax returns.