College education has been a dream for parents and their children for generations. Students work hard to get into their choice colleges and to make their parents proud. However, with higher education costs on the rise, how they’re going to pay for it becomes the next big obstacle. Luckily, financial aid money is sometimes available and has benefitted countless students.
According to a recent study, about $123 billion worth of scholarships and grants were awarded during the 2013/2014 school year. The majority of those came from the federal government (40%), followed by colleges and universities themselves (39%). Private sources accounted for about 13% of that money, with state scholarship funds and similar sources making up the remaining 8%.
These numbers represent a notable increase in financial aid over the last decade. According to the National Center for Education Statistics, about 75% of first-time, full-time undergraduate students received some type of finance package or financial assistance in 2000/2001. By 2015/2016, that number had climbed to 85%. This pattern was observed in both public and private nonprofit four-year institutions. Given the prevalence of financial aid, it’s a good idea to learn how to take advantage of these opportunities to help fund your or your child’s higher education needs.
But this also brings up some questions. What is the difference between a scholarship and a grant? How do you gain access to this money? How do you qualify? Where can you find out about opportunities?
Fortunately, the answers to those questions are straightforward.
Scholarship and Grants: An Overview
On the surface, scholarships and grants appear very similar, since they’re both a form of gift aid. This means that they’re A) specifically gifted to somebody to help them pay for college and B) does not need to be paid back like a loan.
However, there are also a number of notable differences, like:
● Students are typically awarded scholarships based on merit. This can be based on academic merit (essentially a reward for earning high grades in high school). However, it could also be based on athletic or artistic achievement, among other talents.
● Grants are typically based on the student’s observed financial need.
Need-based grants are normally given out by either the federal government, state governments, or by the colleges and universities themselves. One of the most popular need-based grants is the Federal Pell Grant. For the 2019-2020 award year, the maximum amount that could be awarded to a student for the academic year was set at $6,195. The amount awarded is based on a student’s financial need, their school’s tuition costs, and other factors, but a Pell Grant cannot exceed $6,195.
Private scholarships, by contrast, typically come from private or community foundations, nonprofit organizations, unions, or even philanthropist. They can generally award an amount up to the cost of attendance, but keep in mind that full-ride private scholarships are rare.
Types of Scholarships
There are a few different types of scholarships you can choose to pursue depending on your needs. In some cases, you need to apply for these scholarships, while others don’t require an explicit application process. Check with your school or you can see a list of scholarships here. Types of scholarships include:
● Academic Scholarships. These are usually available to students who have demonstrated some degree of academic excellence. The application typically lists GPA requirements to qualify, among other factors.
● Athletic Scholarships. These are usually designed for talented high school athletes who have already shown their prowess in sports. Typically, universities award these scholarships when the student is a potential asset to their team. If the student receives financial aid, the likelihood that the student will attend and play at the school increases.
● Scholarships Based on Other Talents. There are a variety of scholarships available for other talents that the school believes will enrich the community. For example, scholarships are awarded to students with impressive musical talent as they can contribute to the school band or orchestra. A student is more likely to get an artistic scholarship if she or he plans to be an art major or participate in artistic activities on campus.
● Scholarships from Ethnic Organizations. Many ethnic organizations offer scholarships to young people from their communities.
● Scholarships from Religious Organizations. If you belong to a particular religion, there may be a scholarship available to you based on your affiliation with that religion. Ask around at your local place of worship, if applicable.
● Scholarships from Specific Companies. Oftentimes, corporations offer scholarships and grants to students as a way to further their community involvement.
● Scholarships from Organizations Dedicated to Specific Majors or Careers. In an attempt to encourage people to pursue a particular major or career, many organizations offer scholarships and grants as a financial incentive. STEM fields (Science, Technology, Engineering, and Math) are a major example.
Finding the scholarship that is best for you can seem time-consuming and overwhelming. However, with the right tools by your side, it doesn’t have to be.
When it comes to finding scholarships, there are a few key routes you can take. First, call the financial aid office at your prospective school to find out more about the opportunities that are available. Be sure to note the criteria and application deadlines for scholarships or grants.
Second, ask the academic advisor at your high school if she or he knows about any scholarships or grants available at the school you’re interested in attending. It’s important to be aware that many scholarships require SAT and ACT test scores from candidates. Even if the college you’re applying to doesn’t require you to take both tests, it may be wise to do so anyway. It could open the door to a number of additional scholarships and grants that you wouldn’t otherwise have access to.
Third, look online for lists of scholarships and grants. LendKey, for example, has a page dedicated to finding scholarships quickly and easily. You can filter them by the name, award type, the field of study, school type, award amount and other criteria to make things easier and more efficient. A number of similar tools also exist, like this one from the experts at College Board and this one from the U.S. Department of Education’s Office for Federal Student Aid.
Beware of Scholarship Scams
Unfortunately, there are a lot of unscrupulous sites looking to take advantage of people seeking ways to finance their higher education needs. You should always be aware of the telltale signs of scholarship scams. Even if something has an official sounding name with words like “National,” “Federal” or “Foundation” in the title, it doesn’t mean they are legitimate. Pay close attention to warning signs like application fees, loan fees, guaranteed winnings or packages promising to give you “unclaimed aid.” If you suspect a site may not be legitimate, feel free to share your concerns with your school’s financial aid office.
College is More Accessible Than You May Think
As you think about how to finance you or your child’s higher education, grants and scholarships are viable options to enable you to afford the school of your choice. Getting this type of financial assistance isn’t all about your or your child’s GPA or athletic ability. There are different resources available that can provide the funding you need to help make those educational dreams come true.
However, if you still don’t have enough money for college after grants and scholarships, you are not alone. Most people need additional funding to afford higher education. The critical thing is that scholarships and grants have relieved some of the financial burdens that college entails. You’re still paying at least a little less than you would have otherwise – and every little bit helps. Grants and scholarships can make a big difference– you may not need as many loans as you otherwise would have.
You should leave no stone unturned in your quest for college financial assistance. Don’t place all of your hopes on a single application; instead, apply to any and all scholarships and grants that you may qualify for. Just because you already received a scholarship from your college doesn’t mean that you shouldn’t apply for others. When you get additional funding, you’ll thank yourself for all of this hard work since it reduces your need for other, more costly funding options.
If you’ve done all you can to secure as many grants and scholarships as possible and are still in need of financial assistance, don’t worry. LendKey is here to help. If you’d like to learn more about paying for college, or if you still need help financing your higher education after earning scholarships or grants, reach out to LendKey today.