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What Are Scholarships & How Do They Work?

03.28.2022 • 5 min read

Bob Patterson

Former Stanford Director of Admissions

Here’s everything you need to know about scholarships. Learn what they are, how they work, and how to find them.

In This Article

  1. What Are Scholarships?

  2. Who Funds Scholarships?

  3. Types of Scholarships for College Students

  4. How Can Scholarship Money Be Spent?

  5. Will Scholarships Be Enough to Pay for College?

  6. Where to Find Scholarships

Although a college education is becoming more expensive, many students don’t pay the full price. Research done by The College Board in 2021 suggests that the average cost of a four-year institution was 2.58% as high as it was in 1991; however, total state and local funding is now 2% higher. Generous financial aid, which includes grants and scholarships, has made it possible for students to ride the wave of soaring college prices. In essence, your college education isn’t completely unreachable.

What Are Scholarships?

Simply, a scholarship is a financial award that helps you pay for your college education. Scholarships are different from grants though. Unlike student loans, grants are need-based financial aid, but scholarships aren’t based on your financial need or status. Scholarships are gifts. They don’t need to be repaid, and there are plenty of them—if you know where to look.

Who Funds Scholarships?

Many organizations fund scholarships such as:

  • The government

  • Colleges

  • Private charities

  • National and local organizations

  • International foundations

  • Businesses

  • Individuals

There’s really no rule or limit to who can fund a scholarship.

However, as there is such a diverse range of funding for scholarships, be aware of “too-good-to-be-true” scholarships or funding sources. If an organization promises you thousands of dollars to pay for your education—with no proper explanation of what that entails—and they request your bank account details or a fee, stop and think. You can always check with the college admissions or financial aid office about the validity of a scholarship if you’re unsure.

The U.S. Department of Education has a useful article on how to avoid scams, and you can always find more information on the BigFuture section of the College Board. Be smart and safe.

Types of Scholarships for College Students

With so many scholarship sources and providers, there are, naturally, many types of scholarships. Some scholarship opportunities are based on your academic achievement or athletic promise. Others look at your community service, personal hobbies, or simply your ethnicity.

Here are several examples:

  • Academic or Merit Scholarships, such as the Morehead-Cain Scholarship Program, which fully funds four years of college & summer enrichment

  • Athletic Scholarships, such as the Evans Scholars Foundation, which offers full tuition scholarships to high-achieving golf caddies with limited financial means

  • Extra-curricular Scholarships, such as Vegetarian Resource Group Scholarship, which offers anywhere from $5,000 to 10,000 for promoting the cause of vegetarians in your high school or community

  • Identity Scholarships, such as the Descendants of the Signers of the Declaration of Independence Scholarship committee which promises $1,500 if you can prove you have a direct descendant of one of the signers of the Declaration of Independence

  • Community Service Scholarships, such as National Health Service Corps which offers “free-ride” scholarships for future healthcare workers in exchange for 2 years of clinical practice in under-subscribed medical areas

  • Career-related Scholarships, such as a Media Fellows Scholarship for those interested in business

  • Employer scholarships, such as Amazon’s Career Choice program, where Outlier provides Amazon employees with access to foundational college courses.

  • Miscellaneous Scholarships, such as Doodle for Google, which offers $30,000 in exchange for submitting a doodle illustrating the search engine name

For any scholarship, there will most likely be some kind of application process to determine your eligibility. Some may even require you to write a compelling scholarship essay. It’s unlikely you’ll be able to apply to every single scholarship out there—whether because you don’t meet the requirements or simply don’t have time. Do your research and limit yourself to applying for a few select scholarships ‌you know will suit you and your needs.

How Can Scholarship Money Be Spent?

While you could use scholarship money for anything, the “free money” awarded to you is to pay for your education. This could mean tuition, but it could also be other school expenses, like books, housing, food, or even computers. You can receive all the money upfront or in installments.

Your scholarship provider will explain everything when you receive it, including requirements for keeping your scholarship; however, it’s always best to read the terms and conditions beforehand.

Will Scholarships Be Enough to Pay for College?

Unless you receive a fully funded scholarship that lasts for all four years and covers every single thing you need to pay for at college—tuition, housing, food, etc—it’s unlikely a scholarship will pay for everything.

It’s more likely that you’ll need a combination of scholarships, loans, and your own finances to pay for your college education. This practice of combining finances from different sources is very common. Ensure you check in with your university’s Financial Aid Department to stay on top of your payments. They’re usually extremely helpful and very happy to support you. You’ll see that the Financial Aid Department websites support you even before you enroll.

Many universities have their own financial aid calculators as well as contact details to help you estimate the cost of your education.

Where to Find Scholarships

Before you search, our advice to you is to make a plan by writing down your:

  • Extracurricular activities

  • Academic interests & GPA

  • College goals

  • Financial needs

This way, you know who you are and what you’re aiming for. This initial process will enable you to focus on your search. And while you should ‌look for scholarships as soon as you start planning for college, once you enter your junior year of high school, that search should become a real part of your college application process.

When searching for scholarships, start with information you can gather from your high school college counselor and your potential list of colleges. Then expand your access to scholarships significantly by using accredited free scholarship search tools.

Start your local search for scholarships by tapping into‌:

  • High school college counselors

  • College financial aid offices

  • Local foundations, organizations, charities, & businesses

  • US Departments of Education

Then expand your search with resources such as Career One Stop Scholarship Finder and Scholarships.com.

Don’t forget to keep applying—and reapplying—once you’re a college student. There will be plenty more scholarship opportunities after you’ve enrolled. And, although the scholarship application process can seem daunting, free money to pay for your education is worth it.

Good luck!

About the Author

Bob Patterson is a former Director of Admissions at Stanford University, UNC Chapel Hill, and UC Berkeley; Daisy Hill is the co-author of Uni in the USA…and beyond published by the Good Schools Guide 2019. Together, they have established MyGuidED, a new educational tool for students looking to apply to university (launching 2023).

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