Scholarship controversy comes to light

Endowment revelations spark major student conversation

By: Sydney Umstead, News Editor

Students around campus were upset last year to learn, after the fact, that the endowed scholarships they were awarded — which they had counted on to lower their student bills — had not lowered their total balance by even a penny. Further investigation by these students appeared to reveal a series of complicated University loopholes that allow the University to pocket the money while denying these students further financial aid.

Two seniors at Canisius University, Natalie Faas and Mason Bowes, disclosed to The Griffin what actually happened to their student bill when they should have received the scholarships awarded to them through programs linked to the University.

In September, The Griffin caught wind of this potential story involving students, and it has been compiling research and interviews since. This is an updating story.

The Buffalo News

Faas and The Griffin sat down to discuss her endowed scholarship that was offered to her, through Canisius, by The Buffalo News. Faas’s awarded scholarship was worth $3,000 as a merit-based award on her accomplishments as a journalism student in the Buffalo area; however, upon winning, it was communicated to her that only $250 dollars of the total $3,000 would be allocated to her. The application process for the scholarship, as Faas described, was a “lengthy” one that is only given to “the top journalism student,” with the intention of lessening the financial burden of a University education for its recipient.

She explained that the interruption to her financial aid came as a surprise, considering, “One of the things that went into choosing [Canisius] was need — like financial aid.” She continued, “I believe this is happening to all endowed scholarships.”

Faas explained that due to the financial aid package she received when applying for Canisius, she was told she “would not receive that money based off of [her] bill.” However, when she presented her concerns to the Financial Aid Office, the money switched places while still not lowering her bill: Faas explained that the Buffalo News scholarship was used to “to cover $3,000 of the $15,000 Ignatian scholarship that I get every year for merit in highschool.”

Faas continued, “To say that I’m not in financial need is hysterical.” She explained the massive difference that the $3,000 could have made, saying, “I am fully funding my own education through private loans and through [the] money that I make over the summer.”

About her own situation, Faas was told that the issue was not directly related to financial aid but to university policy itself. She went on to mention, “Nobody was willing to send me a picture of my financial aid package and tell me what the issue was.”

While Canisius does own the money that is endowed to the institution through scholarships like the one received by Faas, she questioned whether the people funding the endowments know that scholarships like hers end up going to the University’s bank account and not the students’. She said, “My biggest concern, and it has been my biggest concern and will continue to be, is that I don’t know if the donors know that this is what’s happening.”

Part of the reason this may be a point of conversation is, as Faas stated, because “technically I would still be receiving that money on my bill.” But she emphasized that after the Financial Aid office processes the scholarship, “My Ignatian scholarship wouldn't be $15,000. It’d be $12,000.” In terms of records, therefore, it appears that Faas has received the scholarship — but she’s without any extra aid at all.

At the time of applying, Faas expressed that she would have preferred to know about this situation prior. She argued, “There should be stricter guidelines if you have to be making under a certain amount.”

Following this, Faas later applied for and received a scholarship from the Society of Professional Journalists. She clarified of this scholarship, “They send the check to the person who’s receiving the scholarship, because they’ve been burned by this before.”

Cupola-Everhard

Faas is not alone. Senior Mason Bowes says he lost “about $8,800 or $8,900” to the same process. Bowes’s scholarship was the Cupola-Everhard scholarship, awarded through “academic success in the honors program.” Upon receiving the scholarship, Bowes described encountering a situation similar to the one Faas experienced. He stated: “I was notified that I would be receiving the scholarship money, but that part of my other award, that I initially got when I was admitted into the college, would be deducted.” This notification, Bowes emphasized, came only after he had already won the scholarship.

To explain the numbers, Bowes related that, in terms of the initial scholarship allocations when he started Canisius, “Last year, and every year prior, it was $7,000 a semester. And then coming into this year, it was $3,000 a semester.” Bowes continued, “They gave me the money for the award that I won in the honors program, but then immediately deducted that award from my initial academic scholarship that I got when I came to the college,” resulting, he highlighted, in no additional aid to lower his bill.

As Bowes elaborated on the conversation surrounding these scholarships and the effect of creating barriers to need-based funding, he discussed how the actions of the University have caused stress within his life. He disclosed, “One of the reasons I came to Canisius is because I’m a first-generation college student.” He said, “My family really relied on that sort of scholarship money to put me through school.”

Bowes pointed out that this has harmed his plans for the future, in fact hurting when the intention of those endowing the scholarships is to make life easier. As he is planning to attend graduate school for philosophy, he touched on how “having more debt is really going to impact where I can go, and where I can even choose to apply.”

What are endowed scholarships?

An article on Bold.org explains that “When a large, endowed sum is gifted to a college, the university manages the funds, investing the amount.” Furthermore, “The university then takes out scholarship money from the fund each year, only giving the percentage of the fund that was earned as interest.” This means that the recipient university technically owns the endowed money, and that, once received, it no longer belongs to the person who wrote the check.

Another site, Money.com, posted in an article that “Most colleges around the country… reduce financial aid when students bring in outside scholarships.” This process is called scholarship displacement, as it “happens when colleges reduce your financial aid award by the same amount as your private scholarship, and though it’s not always dollar for dollar, it effectively leaves you in the same financial spot as before.”

However, there have been states who have limited institutions’ ability to do so, including California, Maryland, New Jersey, Pennsylvania and Washington. It should be noted that this process has not yet been explicitly identified as the one being applied at Canisius.

The response of Financial Aid

The Griffin reached out to administrators in the Department of Financial Aid. Kevin Smith, assistant vice president and director of Student Records on Financial Services, stated on the situation described by Faas and Bowes, “I would be upset, too.” He continued, “Due to the university’s financial situation, we’re looking at these scholarships more closely.” Smith stated that each student selected for an award needs to be “reviewed on an individual basis.”

In terms of how the endowment works at Canisius, he addressed that the endowments are typically allocated and decided upon early in a student's academic career. Therefore, when new endowed money is applied, it needs to be assessed differently.

While there may be no official fine print, there was a talk of it being an issue with communication. Smith said, “I think it's the awareness, [and the] University making students aware that it’s much more complicated than it seems," especially, he noted, “when we have to fit those endowed scholarships into [the] already awarded financial aid package.”

Smith explained that it is federal policy that a student’s bill cannot be lower than their cost of attendance. The Federal Student Aid Handbook, as accessed on https://fsapartners.ed.gov, states, “The cost of attendance (COA) is the cornerstone of establishing a student’s financial need, as it sets a limit on the total aid that a student may receive for purposes of the Campus-Based, TEACH Grant and Direct Loan programs, and is one of the basic components of the Pell Grant calculation.”

However, it is university policy to “look at if [the student is] overfunded with Canisius aid,” said Smith.

The Griffin also heard of issues with scholarship endowments in the accounting program, but it has not heard back from sources in pursuit of this story.

The personal effects

Both Faas and Bowes are active members of the campus community, something they both feel particularly upset about in the aftermath of their respective situations. The campus website and Instagram have showcased their images and some of their academic achievements as a point of pride for the University, and, importantly, a draw to pull in new students. They have served on several campus e-boards as well.

On this topic, Faas stated, “It’s really disappointing to me in a couple of different ways, because all I’ve done is been a talking head for this campus.” Faas went on to describe the pain brought on by the situation, lamenting, “It feels like they’ve taken everything that I’ve done for them and just sort of thrown me in the mud, especially since nobody higher up wanted to help me out.”

Bowes commented, “Some of this money not being fully awarded to me [is] affecting how I perceive the school, because one of the reasons I came here was for that scholarship.” In terms of his relationship with the University after his scholarship was effectively rendered useless, he said, “It felt insulting.”

After formerly being the president of the Honors Student Association and wearing many other hats around campus, Bowes noted, “For them to turn around and almost restrict me from getting an award that I was awarded for doing things for the college — it was a little bit weird to me, and it definitely impacted how I perceive the school.”

In the interviews, Bowes and Faas spoke very highly of each other, and their individual places at Canisius. The idea of writing a personal letter to Stoute was brought up; however, the students were not sure if these financial matters ran up that high.

Financial state of the University

Canisius’s 990 report from 2021, a form which the school must fill out if they are to receive tax exemptions, revealed insight into Canisius’s financial state. The report showed that the institution had a net income of negative $4,303,174 for 2021. Just a year prior, in 2020, WGRZ reported that Canisius had reached a $20 million budget deficit.

During the State of the University address that President Stoute gave in October, Stoute discussed that the university is working in a deficit and had “outperformed in a negative way by about $1,000,000,” following an anticipated deficit of $7.4 million. The current deficit was reported by President Stoute in the address, as being $8.5 million.

Stoute briefly touched on the endowed scholarships during his State of the University address and mentioned that they allow the institution to “support our students through awarding endowed scholarships,” but he made no reference to the cases presented by these students, which indicate that at least some of the scholarships are, in fact, directed away from student bills.

On the integrity of what has happened

The issue of ethics was one that loomed above each personal recount of what had happened.

Dr. Graham Stowe of the Writing Center stated that the scholarship debacle is “unethical, and counter to our mission to be for and with others, especially in light of the campus-wide email sent Thursday highlighting our ‘Commitment to a Just Society.’ Not to mention that it’s an ineffectual decision to help solve the budget shortfall.” He later went on to affirm his affection for Canisius as a second home, but he clarified that the situation is embarrassing.

When discussing this story, Bowes and Faas each discussed their opinions of the morals involved with the situation as well.

Faas disclosed, “It was really embarrassing for me.” She continued, “To look back and think about how much the college has betrayed me and betrayed my trust, … it’s the lack of transparency that drives me wild.” She referenced the oft-touted slogan “Where leaders are made” and retaliated that perhaps the slogan could be amended to, “But our students don’t actually mean as much to us as we say they do.”

Bowes stated, “It’s like the whole ‘Where leaders are made’ type thing, but then, you really don’t get anything for being a leader,” as the University touts student accomplishments publicly while blocking access to necessary, deserved scholarships. He went on to say, “Not that I expected anything for being a leader, but just in the vein that the scholarship and award was granted to me based on things that I’ve done for the school.”