SCHOLARSHIP DISPLACEMENT ACT
The passage of HB 5292 is intended to provide clarity and protections for students who receive private scholarships, ensuring that such awards do not negatively impact their reliance on institutional financial aid. By creating this framework, the bill aims to protect students from potential 'displacement' of aid, where institutional funds are cut in favor of private awards, which could undermine the financial assistance students may depend upon for their education.
House Bill 5292, known as the Scholarship Displacement Act, establishes guidelines for how public institutions of higher education in Illinois can handle financial aid adjustments when students receive private scholarships. Set to take effect in the 2024-2025 academic year, the bill specifies that institutions can only reduce institutional financial aid if a student's combined financial aid exceeds their demonstrated financial need. Additionally, reductions can occur if the student is an athlete and there are compliance needs related to athletic associations.
Debates surrounding HB 5292 are likely to center on the balance between public funding and private contributions to education. Proponents argue that the legislation is necessary to maintain equitable financial support for students and prevent public institutions from penalizing students for securing additional funding. Conversely, there may be concerns about the implications for financial sustainability of institutions and whether this approach might lead to increased reliance on private scholarships and disparities in student support.