$100 bills & words Ultimate Scholarship Guide Part 1: How Scholarships Work

The Ultimate Scholarship Guide: How Scholarships Work

Welcome to the first installment of a three-part series all about scholarships! First up: What are scholarships and how do they work?

There are literally billions of dollars in scholarships out there. You are likely well suited for several of them. And winning some free money for college would be pretty sweet…But how do you find scholarships? When should you apply? And how can you improve your chances of winning? We’re going to get to all of that in this three-part series. First up: how scholarships work.

So…what are scholarships?

Let’s start with the basics:

  • In short, scholarships are financial awards you don’t have to repay that cover education-related expenses.
  • They can come in virtually any amount, from $100 (or less) to full-tuition awards. However, most students—about 70%—receive less than $2,500 in scholarships, according to FinAid.org.
  • They might be one-time awards, or they might last for multiple years.
  • Though most scholarships are for high school seniors heading off to college, you can win them as early as junior high (though they’re rare!) and all the way through college and grad school.
  • They might come from any number of sources: your college or university, your high school, businesses, charities, professional organizations, the government, individuals, and more.
  • And they are awarded for all kinds of things!

The majority of merit-based grants and scholarships come directly from colleges, and you might receive merit aid from your college or university based on your academic and/or extracurricular record as part of your financial aid package. Ask your potential colleges if you might be eligible for their institutional merit aid and what you need to apply.

Scholarships are just one part of paying for college. You should apply for financial aid using the Free Application for Federal Student Aid, aka the FAFSA. It’s a huge part of getting financial aid for college, and your FAFSA results can be used to award scholarships. Scholarships can cover more than tuition too; you might get scholarships to cover study abroad, summer programs, or research gigs. 

Related: Understanding (and Maximizing) Your College Financial Aid Package

How to win scholarships

We’re not gonna sugarcoat it: scholarships, especially private ones, are hard to win. Competition is fierce. But it’s a common misconception that you need to be a “perfect” student to win scholarships. You know the one: high GPA, 36 on the ACT, violin virtuoso, and founder of a charity for blind orphans. However! While a stellar academic record will always help you in your quest for scholarships, they’re awarded for much, much more than academic achievement or even being “the best” at something. “Less than 10% of private scholarships are based on academic performance,” says financial aid guru Mark Kantrowitz in his article “Top Ten Myths About Scholarships.” 

Scholarship providers value passion and commitment, like sticking to your favorite sport for many years, even though you never made varsity. They appreciate special circumstances, like overcoming hardships or financial adversity. And they look for students who share their passions and values, like majoring in a particular subject.

You can impress scholarship organizations/application readers by:

  • Being enthusiastic: You’re excited to play that sport, study that major, volunteer for that cause—so show it! Your passion for the subject needs to come through.
  • Showing you want to give back: Scholarship orgs want to invest in students who will keep their mission going.
  • Demonstrating that you share their values: Check out the website, get to know the scholarship awarding organization, and read their mission statement. Even echo some of the words they use if you can.
  • Strong academic record (GPA, test scores, challenging classes)
  • Leadership positions (from holding a formal position in a club to spearheading a project)
  • Demonstrated initiative (like undertaking projects that see results in your school and/or community)
  • Demonstrated commitment to field or cause (like research, professional work, etc.)
  • Civic engagement and awareness (volunteer work and community service)
  • Global engagement and awareness (travel, study abroad, studying a foreign language)

Related: Make Your Scholarship Applications Stand Out in a Crowd

A few more things scholarship providers are looking for

Other things affect your scholarship chances too. Students with Science, Technology, Engineering, and Math (STEM) majors tend to win more scholarships. You’re more likely to win a scholarship at a four-year school than at a two-year school. And, not so surprisingly, students with above-average GPAs and test scores tend to have better chances of winning scholarships too. Remember that luck is a big part of winning scholarships. In general, the more scholarships you apply to, the better your chances of winning. And smaller awards tend to have fewer applicants. If you’re skipping all the “little” scholarships for $500, $250, or less in favor of “big” $10,000 awards, you’re making a big mistake! It’s also worth noting that you need to stay on top of any scholarship requirements you may have as a college student if you have an award that lasts for multiple years, like maintaining a certain GPA—because, yes, you can lose scholarships. All this being said, being involved and trying your hardest in your classes are what will ultimately help you in your scholarship search, and even your college search. So dig into your high school experience and commit to stuff you care about.

What happens if you win a scholarship?

First, you do a happy dance and run around your room screaming “WOOOO!” But seriously, you should be pretty proud of yourself for any scholarship you win. Your hard work paid off! Scholarships are disbursed in many different ways: you might get the money all at once or spaced out over time. The check might be sent to you or directly to your school. You might get the money at the beginning of the school year or in the middle of the semester. You can often find out how a scholarship will be disbursed before you even apply, and if you’re unable to uncover the information on your own, just contact the scholarship provider and ask.

However you get the money, it’s critical to note that the scholarship(s) you win can impact the rest of your financial aid. That’s because winning a sufficient amount of scholarship money changes your financial “need,” which fundamentally impacts your financial aid package. Schools differ in how they factor in outside scholarships. Your college or university might reduce the institutional scholarships or grants they might otherwise have given you, or your school might reduce the loans and/or work-study as part of your financial aid package. Or they might do something else entirely. It all depends. When in doubt, ask your college’s financial aid office.

Related: The 3 Easiest Steps to Winning Scholarships

Scholarships are worth more than money

Just in case you need to be convinced that you want free money…Winning scholarships can also make you a more attractive college, grad school, or even job applicant, much like other awards and forms of recognition look good on your résumé. But even if you don’t win much (or anything), there are a lot of surprising fringe benefits to searching for and applying to scholarships: You end up strengthening a lot of important skills like essay writing, interviewing, researching, résumé writing, conducting business correspondence, and articulating your position on a given issue. You might find that your scholarship journey helps you crystalize how you feel about your major, college or university choice, or even future career. And that can be invaluable.

Check out part two of this series, where we discuss the best tips and places to look for scholarships. You can also start your search on CollegeXpress using our Scholarship Search tool

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