How do scholarships work?
Scholarships are one of the most common ways for students to pay for college. In fact, according to a 2020 report from Sallie Mae, scholarships and grants were the second biggest source of college funding (after personal savings). But many students wonder how scholarships work and what they need to know about the scholarship application process. In this guide, we’ll be talking about:
- What is a scholarship?
- Who awards scholarships?
- Who gets scholarships?
- How can I use scholarship money?
Keep on reading to learn more about how scholarships work so you can find and win scholarships to pay for college!
What is a scholarship?
Scholarships are an award of financial support that help students pay for their education. While the most common types of scholarship are for college, scholarships also exist to help students pay for private K-12 education and graduate school.
The major benefits of scholarships compared to other types of financial aid are that they do not need to be repaid and are sometimes renewable, so students can qualify for them for multiple years of their education.
Who awards scholarships?
Scholarships are awarded by a variety of organizations and even individual people. Organizations that award scholarships include colleges and universities, nonprofits, small businesses, major corporations, the federal government, and state governments.
Who gets scholarships?
Scholarships are awarded to eligible students! Because there are so many different types of scholarships, the types of students who receive scholarships can vary.
How can I use scholarship money?
Scholarships are meant to be used for educational expenses which include mandatory tuition, fees, books, and other supplies. This means that you should be using your scholarship awards on these educational expenses. The other reason for doing this is that it ensures that your scholarship money is not taxable.
However, every scholarship will be awarded in a different way. Some organizations will send the funds directly to your college, while other organizations will directly send you a check. If you receive a check, you can technically use the funds on anything, but we strongly recommend that students use it as an investment in their education. Plus, you may owe taxes on money spent on non-mandatory educational expenses.
Next steps for students
Understanding how scholarships work can help you navigate the scholarship search process more effectively! As a next step you can sign up to receive personalized scholarships in your email!