Student applicants face
fee for scholarship

A $50 processing fee from
Unity House is raising eyebrows
among isle educators

Unity House, the embattled labor organization, is charging a $50 processing fee to students who apply to its scholarship program for the first time, a practice that college administrators and counselors consider a red flag.

Many scholarship programs charge nothing to students who apply for financial help.

"Normally, you don't have to pay money to get money," said Jeff Scofield, president of the Pacific Financial Aid Association, whose members are financial aid administrators from Hawaii and other Pacific islands. "If you're a poor, needy student, there's lots of sources of financial aid where there's no cost and should be no cost."

Scofield, director of financial aid at the University of Hawaii-Hilo, said in the 20 years he has been in this field, he has not heard of an established scholarship program that charged such a fee.

Anthony Pounders, who started running Unity House after a federal judge put the organization under receivership in December, said the processing fee was in place before he was named receiver. He said he would look into the fee.

"If it isn't standard, we'll talk about it," Pounders said.

The Unity House scholarships are awarded to eligible students and can range from $200 to $1,000, according to the organization's Web site.

For a new applicant getting $200, the nonrefundable processing fee represents 25 percent of the award. (There is a $5 discount for applications printed from the Web site, according to the site.) For students who reapply to receive additional money from the organization, the processing fee is $25.

Aulii Ross, a Leeward Community College counselor, said a processing fee generally raises concerns among financial aid administrators, especially given all the non-fee programs available.

"That's one of the biggest red flags," Ross said.

Mark Malmberg, spokesman for Minnesota-based Scholarship America, the nation's largest private-sector scholarship organization, said he has heard of programs charging processing fees, but his does not, nor do the more than 1,000 businesses, foundations and other entities for which Scholarship America manages scholarship programs.

Scofield, the UH-Hilo official, said foundations and other organizations that have scholarship programs typically pay for the overhead through their investment earnings or other sources, not by charging students.

Pounders said he did not know the rationale behind the fee. He noted that the Unity House program typically gives a couple hundred scholarships per semester.

"Anybody who even vaguely qualifies isn't turned down," Pounders said.

Students are applying to the scholarship program as the labor organization struggles through a controversy.

Senior U.S. District Judge Sam King placed the nonprofit labor organization under receivership in December and removed Unity House President Tony Rutledge and his son Aaron.

Federal prosecutors alleged the Rutledges operated Unity House for their personal benefit and squandered millions of dollars. Prosecutors also charged that the elder Rutledge attempted to divert Unity House's assets into overseas accounts to evade a criminal investigation.

The Rutledges have denied any wrongdoing.