Almost all scholarship sponsors have rules for using their money. Make sure you understand those rules and the consequences of breaking them, especially before you apply!
Scholarship Rules Can Be Strict or Liberal
Many students avidly read the rules for scholarship eligibility, but do not realize that there are more rules to follow once you get the scholarship. These rules may affect just how valuable the scholarship may be to you. Here are some questions to ask yourself as you evaluate potential awards:
- Is it renewable? If a scholarship is renewable every year, it can pay your college costs for up to four years. To renew the scholarship, you will have to meet certain benchmarks, such as a minimum GPA.
- What expenses does it cover (and not cover)? Almost all college scholarships are intended to pay for at least part of your tuition and fees. Some scholarships also cover other college-related expenses such as room and board, books, computers, commuting expenses, and school-related supplies. In some cases, they will even cover study-abroad stipends, internship salaries, or travel related to your studies.
- Are there any rules related to financial aid? Some scholarships require you to apply for and accept federal financial aid each year. In these cases, the scholarship is meant to cover any unmet need.
- What is required to keep the scholarship? There are often rules for keeping your scholarship, such as maintaining a certain GPA, residing in a certain county or state, or pursuing a particular major. Some require recipients to participate in community outreach work, join a trade union, attend professional or academic conferences, file for the Selective Service, or teach school in a specific region of the U.S. After graduation, you may even be required to return the scholarship if you don't work for a period of time for a certain employer.
What's the bottom line? Before you accept a scholarship award, make sure you understand your end of the arrangement.
The Consequences of Misspent Scholarship Money
What happens if you use scholarship money for something the rules don't allow? In most cases, you will have to repay the entire award—sometimes with interest—even if you drop out of college. Even bankruptcy might not save you from your legal responsibility.
If possible, choose to have your scholarship money sent directly to the college. If the money is awarded in a lump sum and only a portion of it must be used for direct college expenses, you are still better off sending the entire scholarship directly to the college. The college can then deduct its expenses first and issue you the balance.
Resist Temptation
If the entire amount is sent to you or your portion is sent in a separate check, plan exactly what you will do when the check arrives. Know what college-related expenses you will pay for and stick to your plan. If you're given money for a computer and spend it on spring break, you may have a rude awakening when that computer isn't there when you need it.
There's nothing like staring at a check worth several thousand dollars. It's natural to dream a little. But stick to the rules and support your college dreams instead.
