A report published in the Economic Times in 2022 stated that, according to EduFund, between 2012 and 2020, the cost of education in India surged by about 10-12 per cent.  Periodic rise was not only observed in the tuition fee but also the cost of transportation and exams which, as per the report, impacted the overall spending of parents. 

Further, the coronavirus crisis has created a massive disruption for both school and college students to pursue higher education. Apart from taking a substantial toll on students’ academic progress as well as on their mental health, the pandemic also forced several families, especially those with lower incomes, to compromise the education of their children.

Hence, more scholarship funds are the need of the hour! 

They can not only prove to be an incredible source of financial assistance for the needy students but also help bring social equity thus advancing nation building.

Here are eight reasons why establishing a scholarship fund is a great idea!

1) Make Education Accessible and Affordable

As mentioned above, due to financial difficulties, many students across the country are being denied the opportunity to benefit from a quality education that is seen as the cornerstone of their future academic and professional careers. Furthermore, education and poverty are inextricably linked — the more education one receives, the better their chances of boosting the individual and family income and transitioning out of poverty. In this way, the scholarships could ease the financial burden on underprivileged students and their families by creating opportunities for students to receive a quality education, thereby enhancing their career prospects and helping them break the cycle of intergenerational poverty .

2) Empower Students

A scholarship fund could be a great medium to target and support students from communities that haven’t historically had access to higher education. These students can belong to backward communities or from families with lower household incomes.  Scholarships can also be very effective in reducing dropouts and can also aid in lowering student loan debt, which can significantly affect students’ capacity to maintain their financial security in the future. Obtaining a scholarship not only relieves students' financial burdens by covering tuition fees and or miscellaneous expenses, but also allows them more time to study and achieve higher grades. They help students navigate their academic life with confidence and empower them to achieve their desired academic goals.

3) Giving Back to the Society Through the Right Medium

It has been observed that insufficient and unequal access to quality education can impede economic development and poverty eradication within a society. Also, educational attainment, as a measure of a population's human capital, is a key determinant of a country's prosperity and global economic competitiveness. Therefore, there couldn’t be a better way to give back to society than investing in the education of the next generation. A scholarship fund not only serves a noble cause by serving the disadvantaged sections of the society but also ensures that you are contributing to national development in the long run. 

4) Save Taxes 

Donors who establish a scholarship fund with an NGO or contribute to an already established scholarship fund are eligible for tax breaks of up to 50% on their contribution. This means that if the donor donates INR 10,000, sh/e can reduce her/his total taxable income by INR 5,000. This implies that if the donor is in the highest tax bracket of 30 percent, her/his tax liability will be reduced by INR 1,500. It is a win-win situation to save taxes while ensuring that the intended scholarship amount reaches the beneficiary.

5) Encourage Philanthropy

For centuries, philanthropic giving has been an important part of our communities. It contributes to the funding of important causes, organisations, and individuals in need. Many donors see education as one of the most important ways for their philanthropy to make a difference. There are numerous approaches to funding education. Scholarship funding can be a significant, even transformational, philanthropic strategy for those who want to increase educational opportunities for others. Furthermore, anyone who has received a scholarship understands how much stress it can alleviate. It also provides a unique opportunity to "pay it forward" later in life, encouraging philanthropy.

6) Encourage Diversity

Scholarships benefit society by promoting diversity and access to education, resulting in a better-educated and more productive workforce. Studies have shown that diversity on school and college campuses improves intellectual engagement, self-motivation, citizenship, cultural engagement, and academic skills such as critical thinking, problem-solving, and writing for students. Interacting with diverse peers outside the classroom benefits students, making them better scholars, thinkers, and citizens while preparing them for their professional lives. By providing equal opportunities for all students, the donors thus can contribute towards fostering a more inclusive and diverse society where everyone can reach their full potential.

7) Creating a Legacy

It's heartbreaking to lose a friend, family member, or mentor. It is difficult to cope with the loss, but memorializing your loved one with a scholarship fund is a beautiful way to extend their legacy for years. You can determine who you want to assist through the memorial scholarship fund as a donor. You want to remember the person you lost when applying for a memorial scholarship. What characteristics did they possess? What were they concerned about? What have they taught you? These questions help a donor determine how to create a meaningful and personalised scholarship that can benefit society and, at the same time, serves a tribute to their loved ones.