01/13/2022

Three Do's and Don'ts of Scholarships

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Understanding how to find scholarships, what to avoid, and how they affect financial aid in advance will give you a leg up when it's time to start applying.

Three Do's and Don'ts of Scholarships

Federal and state governments, colleges, and private third parties offer grants and scholarships to help pay for college. But unlike other parts of the financial aid package, grants and scholarships are free money; they neither need to be repaid like loans nor be earned like a work-study award. 

Grants are typically awarded based on calculated financial need. High school seniors automatically become eligible for need-based financial aid when they file the Free Application for Federal Student Aid, a.k.a. the FAFSA. Conversely, colleges typically award scholarships based on merit. Merit scholarships are often provided without a separate application for academic excellence, athletic prowess, artistic talent, and many other reasons, including geographic diversity, as a way for colleges to round out their freshman class.

In addition to need and merit-based financial aid from the government and colleges, third parties such as employers, large national foundations, local charities, and others also offer free money to college-bound students. Each year, industrious students as young as grade school age compete for billions of dollars in contest, prize, and scholarship monies offered by private third parties.


Here's How to Uncover Third-Party Contests, Prizes, & Scholarships


  • Check with your high school college counseling office. School counselors are a particularly rich source of information for local and state scholarships. They know the sponsors, the criteria and the student's profile in order to quickly direct students to scholarships in the student's areas of particular strength.
  • Use a free online scholarship search service. In addition to the free scholarship search tool here, you can find others online. Be aware that some of the others require an email address to "register."  Often, they will send regular scholarship updates that can be helpful but may also bombard your in-box until you unsubscribe.
  • Look in a comprehensive scholarship listing book. In either digital or print editions, this old-fashioned approach still works well.


Once the search has been narrowed to a workable list of scholarships, it is important to stay organized and be aware of the deadlines. Students will likely need to collect transcripts, records of awards/honors, and/or letters of recommendation. To make the process more efficient, students may sift through each of the application requirements to find similarities among them. Sometimes the core of one essay may be modified to address multiple applications.


Here's What NOT to Do


  • Pay a third party to do the search. With the abundance of free resources, there is no reason to pay a third party to search for private scholarships.
  • Pay a fee to file a scholarship application. Those who set up legitimate third-party scholarships are motivated to help students and will not charge a fee to be considered for their scholarships. Scholarship "entry" or "administrative" fees often signal a scam. Steer clear of them.
  • Assume a student will not be eligible. Conservative estimates indicate that millions of dollars of third-party scholarship money go unclaimed every year.  Usually, the unclaimed money is offered by sponsors with very specific criteria, perhaps a certain ethnic or religious background and an academic major in a specific discipline or the children of military veterans with other criteria. It may pay to shop around to find sponsors of scholarships that fit a student's unique background and interests.


While searching for free money, be creative and inquisitive. There are prizes, contests, and scholarships for just about everything from serious endeavors such as winning a national spelling bee or playing the piano to the fun and creative such as making prom attire out of duct tape or doodling.

One potential fly in the ointment: receiving third-party scholarships may result in a reduction of other financial aid awards. Check with the school's financial aid office to understand how a third-party scholarship will affect your financial aid eligibility. And be sure to read the fine print to understand the terms of the awards and ask good questions: Does the award cover each year of college or just the freshman year? Is the award automatically renewable or does the student need to reapply? Are there requirements to maintain the scholarship?

Third-party scholarships can take the sting out of paying the college bill. Knowing how to find them, what to avoid, and how they affect financial aid in advance will give you a leg up when it's time to get started.