SCHOLARSHIPS
This is a complicated one, so stay with me!
Almost everyone hopes to finance their college education with scholarships. They’ve been told there are millions of dollars waiting for students to claim. The more popular (and reputable) sites are www.fastweb.com, www.scholarships.com, and www.bigfuture.collegeboard.org. They are all about the same and act as a clearinghouse for private scholarship information. Please feel free to create an account at any of them. Please do not ever pay someone to find you scholarships. Scammers will go to these free websites and charge you for the information.
Here’s the reality:
There are around 1.7 million private scholarships in the USA, with a value of about $7.1 billion.
That sounds like a lot.
But here’s the catch. They don’t give it all away. They only award a small percentage of the total worth because these are endowments. That means the principle doesn’t get touched. Foundations only give away a portion of the interest the endowment earns. This is how they have enough money to give a scholarship year after year. Private scholarships can be for ANYTHING and do not always require top grades. Some don’t even need an essay! For example, have you heard of the contest to make a prom outfit from Duck brand duct tape?
Back to the serious stuff. According to Research.com, only 12.5% of students receive scholarships, and 97% receive $2500 or less. Only .2% (did you see that point in FRONT of the two?) received scholarships worth $25,000 or more.
I am going to focus on merit-based scholarships unrelated to athletics. Click here for the stats for athletic scholarships by division and sport. Only 1.3% of college athletes get ANY scholarship at all. But it can help you get admitted.
The vast majority of scholarships come from the colleges themselves. Need-based scholarships are the most common type, and you have no control over how each college determines “need.” That leaves merit scholarships. Highly competitive schools rarely offer merit-based aid. When they can fill their classes 25 times over, they don’t need to entice anyone to attend with extra money. These are the Harvard and Stanford types.
And then there’s stacking versus collapsing . . .
Imagine you get a college financial aid offer that says your cost after financial aid will be $12,500. You got an outside scholarship for $2500. Score! You just reduced your cost to $10,000, right?
Maybe, maybe not.
Generally, scholarships get reported to the school you choose. The foundation often sends the check directly to the school. If a school allows “stacking,” they will apply the money to the portion you owe. Awesome. That’s the best-case scenario.
But that doesn’t always happen. Some schools use outside scholarships to save THEMSELVES money. They collapse the money into their existing offer leaving you with the same $12,500 bill. I think it is robbery.
How will you know? You have to ask each school. They won’t volunteer the information, so email them and ask. Every school sets its own policy regarding outside scholarships.