High schools are all pushing seniors this time of year to find scholarships to pay for college. But what they don’t tell you is that for most students, outside scholarships are either a waste of time or provide a benefit you won’t see for years.
The reality? Most scholarships benefit only the colleges not the students.
First a definition. Outside scholarships are those that you receive from a group other then the college or the federal and state government.
Here is what happens if you get a scholarship. You need to report that scholarship to the college you will be attending. The college will then reduce your financial aid award by the entire amount of the scholarship. The result is that the cost of the college is the same to you whether you have a scholarship or not.
Now colleges have two options when they reduce your financial aid award. Some colleges reduce your grant from the college by the amount of the outside scholarship so you get absolutely no benefit.
Other colleges will reduce the loan they plan on giving you by the amount of the outside scholarship. This benefits you by reducing the amount of loan you will have when you graduate from college. However, the amount you have to pay for college that year will be the same as before the scholarship.
There is one group of students that do benefit from outside scholarships. Have you guessed who they are?
Students who do not qualify for any financial aid. Yep, if you don’t qualify for financial aid, then any money you receive in outside scholarships will reduce what you need to pay for college. Thus, you may apply for hospitality school scholarships.
And that is the upside down world of outside scholarships.