Freedom Scholarship update: $10 million awarded, $260,000 converted to loans

South Dakota Freedom Scholarship Board Chair Dana Dykhouse (center) talks with board member Diana Vanderwoude (left) during the group's July 22, 2024 board meeting in Sioux Falls. (Joshua Haiar/South Dakota Searchlight)

SIOUX FALLS — A scholarship program that incentivizes graduates to stay and work in South Dakota has awarded 2,785 scholarships to 1,995 students in its first two years. 

“Most all of them are going straight into the South Dakota workforce,” said Freedom Scholarship Coordinator Elli Haerter.

The board that oversees the program revealed data from its first two years during a Monday meeting at First Premier Bank in Sioux Falls.

The scholarship was established by the South Dakota Legislature and supported by donations from entities like First Premier Bank, Avera, and Sanford Health. It offers scholarships based on financial need to students who attend South Dakota colleges and commit to remaining in the state for at least three years post-graduation. 

Students must maintain a 2.0 grade point average to keep the $1,000 to 5,000 scholarships, which students can earn across multiple school years.

With exceptions, the program converts the scholarships into loans with a fixed interest rate of 4% for students who do not meet the program’s grade, graduation or post-graduation residency requirements. 

In the program’s first two years, 182 scholarship recipients have graduated and found work in the state, Haerter told the Freedom Scholarship Board on Monday. Fifty-five of them found work in healthcare;40 are in the education sector.

The data shared Monday also included information on students who’ve failed to adhere to the scholarship requirements. 

As of July, there were 143 scholarship recipients in that category. Specifically, 101 have been referred to a debt servicer for repayment, 15 have paid off the loans, five have had their debts forgiven and 22 have had their loans deferred. That’s typically because the student is pursuing tech school or an apprenticeship instead of college, Haerter noted.

Board Chair Dana Dykhouse said the state should not convert scholarships to loans for awardees who leave college to pursue a technical degree.

“I don’t think it should matter because, at the end of the day, we’re still getting a South Dakota worker,” he said. “And the state has a big need for workers.”

About $260,000 in scholarship dollars is now loans. Comparatively, around $10 million in scholarships has been awarded, according to Haerter. She and Dykhouse said those numbers are good, and will only improve as the program gets better at identifying students in need who are likely to succeed with the scholarship. 

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