It's time for the "August surprise," when colleges and universities take private scholarship money and subtract it from institutional grants. Half of colleges, in fact, reduce their offers of financial aid when students win outside money.

Know as "scholarship displacement," the practice is now coming under fire. Lawmakers in five states have passed restrictions, with similar legislation pending in others. A proposal in New Jersey would widen that state’s ban to private, not just public, universities and colleges. 

Like scores of smaller, less-prestigious schools before it, plummeting enrollment pushed tiny Cazenovia College to the point where it couldn’t pay back the $25 million it owes creditors. 

Now, as the 200-year-old institution in rural upstate New York embarks on the tough task of winding down and liquidating, Cazenovia serves as a useful reminder of the challenges that other troubled colleges could face in the ever-widening shakeout of higher ed in America.

Many college students take out loans from the federal government to help pay for college, but there’s a cap on the amount they can borrow. When they still can’t afford the cost, they face a choice: Don’t go to college, or take out riskier private loans to cover the rest. 

At some Pittsburgh universities, more students are taking on larger amounts of private debt than others nationwide. That raises questions about the affordability of these institutions and the financial guidance students receive. It also means more students are borrowing with fewer protections.