Outside scholarships and their effect on financial aid
For students who are not eligible for need-based financial aid, or for those who do not want to take out loans because of the amount that you must pay back, outside scholarships are a good way to finance their college education.
What is an outside scholarship?
An outside scholarship is any scholarship that is not awarded by the government or the school you are attending. It can be from a company, philanthropist, or foundation. It does not have to be repaid and is an honor that reflects your competence in a given field. You can also use it on your resumé.
Who gets an outside scholarship?
Generally, the sponsoring organization will award a scholarship based on merit and special qualifications, such as academic, athletic, or artistic talent. There are also scholarships for underrepresented groups, certain geographical areas, or financial need. The sponsoring organization decides who will receive the scholarship.
Tips for getting an outside scholarship
1. Prepare Early
Many prestigious scholarships will award their scholarship to high school seniors with a high GPA (over 3.0). Some have a deadline in the fall of your senior year, so the earlier you start your preparation, the better.
Scholarships also require essays, portfolios, and other things that should make you stand out from the crowd. If you have not thought about scholarships until the second semester of your senior year, it will be hard to win a scholarship. Prepare early!
2. Apply for the right ones
Use scholarship search tools like Fastweb to find the right scholarships for your field of interest. When you complete a profile, the system matches you to scholarships that you may qualify for.
If you are interested in programming, apply for a programming scholarship. If you want to become an artist, enter an art competition that awards scholarships. This will not only increase the likelihood of winning the scholarship, but also it will be helpful for your resumé.
3. Use your resources
Some people and organizations you should definitely ask for information are:
- Your school’s counseling office. They may be aware of scholarships that you have never heard of before.
- Your parents’ employer. Sometimes employers have scholarships for children of employees.
- Professional sports teams
- Professional and trade associations
- Ethnic and cultural organizations
- Religious organizations
- Political parties and politicians
- Military associations
- Local governments
- Private foundations and charities
4. Keep track of deadlines and information
When you are applying to a lot of different scholarships, keeping track of so much data can be confusing. To help combat this, you can:
- Set up a separate email account just for scholarships.
- Set up a calendar with all deadlines.
Also remember that submitting the application well before the deadline can be beneficial.
5. Foster a constructive relationship with your teachers and counselors
The more prestigious a scholarship is, the more likely it is that it will require recommendations and transcripts. Be sure that your teachers know your interests and abilities. Also, when they write your recommendations, give them a short written overview of your accomplishments, so that they can mention them in the recommendation letter.
What happens if you get an outside scholarship
Your financial aid package changes
If you are eligible for need-based financial aid and have submitted the FAFSA, your aid package will be accordingly reduced so that your total financial aid will not exceed the cost of attendance by more than $300. This is a federal rule, so that schools often do not have a choice in the matter.
However, schools will usually allow some room to tweak your financial aid package. For example, they can cover all unmet need first, before reducing your package. Also, certain grants, such as the Pell Grant, tend to stay the same. The outside scholarship is likely to affect campus-based aid first, such as the FSEOG Grant, Perkins Loan, Stafford Loan, Federal Work-Study, and the school’s own student aid funds.
You should contact your school directly for more details.
You must report it
If you get an outside scholarship, you must notify your school’s financial aid office. If you do not, you may be required to pay back all or part of your need-based financial aid package to the school or government.
Benefits of outside scholarships
Whatever your school’s specific policy on outside scholarships may be, you will benefit from outside scholarships because:
- You do not need to pay them back. They're like grants, rather than loans.
- Any unmet need usually gets covered first, before your financial aid package is reduced.
- Scholarships are usually merit-based. It is an honor that you can list on your resumé.
- Some schools offer other benefits to scholarship winners, such as priority in selecting a dorm room or an opportunity to work as a research assistant.
- Even if you are over-awarded, you can negotiate with your school so that you will get the most from your scholarship award.
- Even if you are over-awarded, you can negotiate with the sponsors so they can defer all or part of the award to a future year. This way, you can take advantage of the outside scholarship in future years, and your loan will be reduced first before any grants.
- Some scholarships are full-tuition academic scholarships, which means that you will not need to worry about financial aid for that year.