What is a Scholarship?
Scholarships are a form of gift aid because they do not need to be repaid. They are given to students to help pay for their education; most scholarships are, in fact, restricted to paying for tuition expenses only, although some scholarships will also cover room and board. Scholarships are awarded to students who apply for them and who demonstrate talent in areas such as academics, athletics or arts, or who meet certain qualifications such as field of study, ethnicity, gender, religion, location, etc.
Types of Scholarships
In general, there are two types of scholarships: Institutional Scholarships and Private Sector Scholarships.
- Institutional Scholarships: Contrary to popular wisdom, most scholarships are usually awarded by schools themselves. Known as “Institutional Scholarships,” they are awarded through the financial aid office of colleges and universities. The money for these scholarships usually comes from endowment funds, private sector funds, donations and alumni. In contrast, the money available from private sector scholarships is actually quite small.
- Private Sector Scholarships: There are thousands of private sector scholarships available and their award amounts vary widely. They are offered directly from businesses, private foundations, religious groups, and community organizations (such as the Rotary or Lions club). Most of these scholarships are reserved for students with special qualifications, such as ethnicity, religion, location, field of study, and an endless list of ever-popular quirky qualifications (such as being left-handed or a twin.)
Note: you are required to report any private sector scholarships you receive to your school - the amount of which is usually reduced from the financial aid package they offer you.
How Do I Find Scholarships?
Despite the fact that scholarships are free money, students tend to overlook (or under research) them. Institutional scholarships are offered through each school’s financial aid office, and are usually awarded on the basis of excellence in academics, athletics, arts, and other fields. They may or may not be need-based. Many schools will automatically consider you for relevant scholarship programs or recommend that you apply for them. Speak to a financial aid representative at the schools you are applying to to find out which scholarships are offered through their office that you may qualify for.
Private sector scholarships, on the other hand, may require more research. Financial aid offices are usually well-aware of the top programs and may recommend a few to you, but most people do the research themselves. With dozens of online sites today offering free scholarship databases, there's really no excuse anymore for not doing a bit of research yourself.
You should search at least two of the major online scholarship databases. You’ll begin to notice overlap between them, as many of them use the same methods for compiling their data and some even use the exact same databases. Nevertheless, by searching multiple sites, you’re more likely to find small and/or local awards that aren’t listed by every online scholarship database. Please refer to the College Resource Center for a list of recommended scholarship databases.
Two important warnings about seeking out a scholarship: (1) Don’t pay to search for a scholarship. The fee-based scholarship search services don’t offer anything more than the free sites. (2) Avoid scholarship scams. Each year, thousands of students fall victim to scholarship scams. Our simple advice is to avoid any scholarship offer that requires any type of payment – be it a “processing fee”, a “tax pre-payment” or even an “application fee”. Legitimate scholarship programs don’t require any payment whatsoever.