The Myth of Private Scholarships
When parents and teenagers start contemplating college costs, they often assume that applying for private scholarships is their ticket to shrinking costs.
Unfortunately, they’re usually wrong.
Frankly, only 7% of college-bound high school students win a private scholarship. Okay, okay. Admittedly, most teens don’t bother to apply, but even if a teen is an eager beaver and willing to pursue leads, the realities of private scholarships can be discouraging.
Before starting a search, you need to appreciate some of the harsh realities about these prizes. Private scholarships are often only awarded for one year. So if you hustle like crazy to win scholarships to cover your freshman year, you will still have to deal with three years of colleges costs.
But here is what can be most discouraging: Enterprising students who capture a scholarship can jeopardize a portion of their financial aid award. Federal rules require that a school consider outside scholarship money when calculating its financial aid package. Let’s say, for instance, that a family’s expected contribution to a school is $15,000 and the cost of the college is $25,000. The school offers a financial aid package of $10,000 to fill the gap. Now let’s suppose that the student wins a $2,000 scholarship. The school would reduce its financial aid package by $2,000.
When this occurs, it’s better if a college reduces the size of a loan in its financial aid package rather than grant money that needn’t be repaid. Some schools will and some won’t. It makes sense to ask financial aid officers at the institutions that interest you about their policies regarding private scholarships.
Frankly, it will usually be more worthwhile for students to look for merit awards from individual colleges and universities. A school’s own scholarships are often vastly more lucrative than what you can expect with a private scholarship and they typically last four years. At private schools today the typical merit award will knock 33.5% off the tuition. In contrast, a study conducted by the Institute for Higher Education Policy concluded that the average private scholarships for undergraduates is worth a mere $1,982. What’s more, cash available from private scholarships represents only 7% of all the grant money awarded to college students.
The Institute for Higher Education Policy’s report also addressed another common misconception. The belief that all sorts of private scholarship money is unclaimed every year is completely overblown.
Finding Private Scholarships
Typically, the best known private scholarships are also going to be the hardest to win. Brilliant kids who have the most remarkable resumes are going to snag national scholarships such as the Coca-Cola Scholars awards, the AXA Achievement Scholarship, Gates Millennium Scholars, and the Intel Science Talent Search. Most of the kids who contemplate applying for these sorts of mega awards will be wasting their time.
So what about everybody else? Try looking for scholarship cash by hunting in your own community and region. Do your parents’ workplaces offer scholarships to children of employees? Some unions also kick in money for the right kid. Service organizations are another good vein to mine. Here are some to contact:
Independent Order of Odd Fellows and Rebekah Lodges
Benevolent & and Protective Order of Elks
This article is an excerpt from The College Solution Blog by Lynn O'Shaughnessy, author of The College Solution: A Guide for Everyone Looking for the Right School at the Right Price.