Paying for College with Scholarships

Scholarships are one of the best ways to pay for college. Scholarships provide free money you don't have to earn (through student employment) or pay back (like student loans).

More than $6 billion in scholarships are awarded each year. About $5 billion in scholarships go to students in Bachelor's degree programs and about $1 billion in scholarships to community college students.

Types of Scholarships

There are several different types of scholarships. Most scholarships are awarded based on merit, such as academic, artistic or athletic talent. Merit-based scholarships can also be awarded based on the student’s activities and accomplishments.

Some merit-based scholarships may also consider demonstrated financial need. However, awards based solely on financial need are called grants, not scholarships. For example, the Federal Pell Grant is based on financial need, not merit.

Another type of scholarship doesn't require merit or financial need. These scholarships, like the ones here on, are awarded based on random drawings.

How to Find Scholarships

Scholarships are awarded by foundations, corporations, employers and other private organizations, as well as by colleges and universities.

Here are some helpful resources:

  • Free online scholarship search services (like find scholarships that best match your personal background profile.
  • Scholarship listing books are another good starting point in your search. You can find them in the reference section of your local library or bookstore, near the jobs and careers area. (Just be sure to check the copyright year and get a book published in the last 2 years.)
  • Web sites of national and local organizations that are related to your talent or future field of study may provide information on any scholarships sponsored by the organizations.
  • Your high school and local colleges may post scholarships on web sites or bulletin boards.

Pitfalls that Affect Scholarships

Scholarship Scams

  • Never invest more than a postage stamp to apply for a scholarship or to get information about a scholarship. If you have to pay money to get money, it's probably a scam.
  • Real scholarships are about giving money to students, not getting money from students.

Scholarship Displacement

When you win a private scholarship, you have to tell your college about it. Your college will then change your financial aid package:

Some Policies Help You Financially Some Policies Provide No Financial Gain
  • College reduces your student loans, so you'll be able to borrow less
  • College reduces your student employment so you’ll be able to work less and spend more time on your academic studies
  • College reduces your need-based financial aid
  • College reduces its own grants

When choosing a college, it's important to find out about the college’s "outside scholarship policy" to make sure that winning a private scholarship will help you financially.

Take the first step to win a $10,000 scholarship: Join

Check out these related articles: