Scholarship changes help students in tough timesFoundations across the state are feeling the punch of the turbulent stock market — posting millions in losses.
By: Maria Lockwood, Superior Telegram
Foundations across the state are feeling the punch of the turbulent stock market — posting millions in losses.
With that in mind, the Superior Scholarship Foundation minted a new policy in January to prevent the class of 2009 from bearing the brunt of the market tumble.
For most scholarships, a large chunk of money — principle — remains in the bank untouched. Interest earned on the principle is doled out to Superior High School scholarship recipients.
That won’t work in this economy.
“It’s been a huge drop in the market; the kind of cash these (investments) usually throw off has been cut back,” said Bruce Thompson, executive vice president and chief lending officer for the National Bank of Commerce and member of the foundation board.
“We’ve got to make sure this senior class doesn’t take the hit for what’s happening in the whole world,” said Nancy Pederson, the foundation’s executive director.
The new policy allows the foundation to use a five-year average to determine how much to award in scholarships. They can look back at the interest made in the past five years and average it.
“Five-year averaging is just a wonderful way of balancing things for the kids,” Pederson said.
The practice is used by a number of organizations to soften economic dips and bumps, Thompson said.
“That’s exactly what the retirement system does,” Pederson said.
That alone may not be enough.
The foundation will most likely dip into the principle to provide some of the larger scholarships, Thompson said. The Victor and Mary D. Nelson Scholarships, for example, are a four-year commitment. Last year’s seniors got a set amount, and can expect that same amount every year for four years.
“A $3,000 Nelson is really a $12,000 Nelson,” Pederson said.
“We need to continue to honor them,” Thompson said.
In addition, between 12 and 20 new graduates are awarded Nelsons each year. That fund alone provides up to $80,000 to new graduates and about $240,000 to prior graduates, Pederson said.
The Nelson scholarships were established in 1973. In the last 35 years, Thompson said, the fund has built up a sizable cushion.
“The principle is well beyond what was originally committed,” he said. That will allow the foundation to dip into the investment this year without jeopardizing next year’s scholarships.
Pederson estimated the foundation gives out $400,000 in scholarships every year, including the Nelsons.
“We have one of the largest per capita scholarship programs in the state,” she said.
And more scholarships are added every year. They are named for former teachers, SHS graduates and community members who felt the need to give back.
“You can’t believe the amount of money people give to our kids,” Pederson said, in good economic times and bad.
Applications for the Nelson and John F. O’Hara Memorial Scholarships were accepted in February. Winners will be notified in May.
The class of 2009 has until April 20 to apply for the other foundation scholarships. Applications are available in the SHS guidance office. A complete listing of scholarships are available online at www.superior.k12.wi.us by clicking on the students, then scholarships links.