Scholarship Basics

What Are Scholarships?

College scholarships provide money to help you with college expenses. You don't have to pay them back. Amounts range from a few hundred dollars to "full" scholarships that pay all college expenses. Most scholarships cover only part of the expenses, often only a small part.

Unlike grants, which are usually based on financial need, scholarships are awarded based on a wide range of qualifications. These usually include academic achievement and may or may not include financial need. Many scholarships emphasize other qualities, such as leadership, talent, and community service. This makes them accessible to a wide range of students, since there are many ways to qualify, and there is an incredible range of providers.

How Do You Get Them?

In some cases a college may award you directly as part of your financial aid process. In many other cases you apply or get nominated, often competing with other students. Some scholarships have simple application procedures, such as writing a short essay. Others require nearly as much paperwork as a college application. Weigh the potential reward carefully against the time you can spare to apply.

How to Get Started

One handy way to look for scholarships is to look "inside" and "outside" the college. Inside the college are scholarships given or administered by the college. Outside the college are scholarships offered by everyone else, including companies, the military, foundations, and organizations.

Scholarships That Come from the College

Almost all colleges offer scholarships to attract a talented and diverse student body. These scholarships are also called "academic awards," "gift aid," "merit aid," and "institutional aid." Financial need may or may not be a factor, but academic achievement is always important. Specialized scholarships focus on specific majors and athletics. Lastly, a college's financial aid office may also manage some state or private scholarships.

Here's a tip: Check with the financial aid office at your target colleges to find out how to apply for college scholarships—and what the requirements are. It may be as simple as checking a box on your college application form or as complex as an entirely separate application process. If you know your major, check with that department to find out about major scholarships. Athletic scholarships are awarded through the NCAA sports recruiting process. Check with ncaa.com.

Here's another tip: CollegeData's College Match tool gives you information on the merit aid criteria and average merit awards for individual colleges.

Scholarships That Come from Other Sources

You've heard the expression "The sky's the limit." For all practical purposes, this is true for scholarships offered outside the college. You may get money for having a certain last name, a certain hometown, even ancestors from hundreds of years ago.

Thousands of foundations and groups look for students to award every year. Believe it or not, some of these don't get enough qualified applications! For example, one student applied for an award offered by a local heritage club. She was the only qualified person to apply, and she received $6,000 over four years.

Here are some types of organizations to start with:

• Corporations, especially local businesses and your parents' employers
• Religious groups
• Unions, a major source of scholarship money
• Chambers of Commerce, which can also help you search for other community sources
• Community and service organizations, many of which have state and local chapters
• Clubs, foundations, and associations, which can be based on heritage, professions, hobbies—you name it
• City, county, and state education offices
• Your high school or school district

Here's a tip: Use CollegeData's Scholarship Finder to locate private scholarships. Over half a million awards are listed! Your high school counselor can also be a big help, especially for local scholarships.

Get in the Running for National Merit Scholarships

You've probably heard of the National Merit Scholarship, which is worth $2,500 a year. To be eligible, you must take the PSAT in your junior year of high school. High scorers who qualify as semifinalists must then meet academic and other standards to advance to the finalist level. Winners are selected based on criteria such as volunteer participation, teacher recommendations, high school grades, and the rigor of courses taken.

Those who don't win may still be eligible to apply for Special Scholarships, which are funded by private businesses. African American students who achieve high scores on their PSAT can also compete in a separate National Merit Scholarship competition known as the National Achievement Scholarship Program.

Here's a tip: Find out more in CollegeData's article The Scoop on National Merit Scholarships or at nationalmerit.org.

The Military Offers Generous College Money

Through the ROTC (Reserve Officers' Training Corps) program, the Army, Navy, and Air Force offer full scholarships (covering tuition, fees, and textbooks). However, the student must agree to serve in the sponsoring branch of the military for a certain number of years after graduation. These scholarships are very competitive. They are not available at all colleges and may depend on your major. The military understandably favors majors that will benefit its mission, such as engineering or nursing.

Here's a tip: There is a separate ROTC program for each participating branch of the military. For more information, read the CollegeData article ROTC Scholarships, and visit the websites of the U.S. Army, Navy, and Air Force.

Some Words to the Wise Scholarship Searcher

Scholarships may seem like free money, but like most things in life, nothing is without complications. Look out for the following and be a wise scholarship consumer:

Scholarship scams are lurking. From the moment you start searching, you will see the ads claiming "billions of awards go unclaimed" and "find thousands for college for one low fee!" You don't need to pay to find scholarships. Instead, do it all for free using CollegeData's Scholarship Finder.

Scholarships may affect your other financial aid. If your college has already met your financial need with need-based aid, it is required to reduce your aid by the amount of your scholarships. Exact policies vary by college. If the school replaces its own awards with your outside scholarship money, you can appeal to both the financial aid office and to the private scholarship sponsor.

Your scholarship may be short-lived. Don't assume that a scholarship you receive as a freshman will continue over the following years. You may need to reapply. Or it may not be renewable at all.

There may be strings attached. The scholarship sponsor may expect something from you as simple as attending a meeting of other scholarship winners or as complex as working for them after graduation. Check carefully before applying. Read the CollegeData article Scholarships with Strings Attached for more information.

The rules may be in the fine print. Many scholarships ask for progress reports, a certain course load, a minimum GPA, etc. Don't lose a great award by overlooking the rules.

You may be taxed. Scholarship money used for travel, room and board, research, and nonrequired equipment is taxable income. It's not taxed if used for tuition or required textbooks and supplies.

Go Treasure Hunting

Be sure to use the scholarship search tool on this site, Scholarship Finder, in your search. Finding scholarships appropriate for you will take some time and patience, but your search is bound to pay off in the end.

Note: Financial information provided on this site is of a general nature and may not apply to your situation. Contact a financial or tax advisor before acting on such information.