College Scholarships – Murky Waters for Students and Parents

The following is a guest post from College Search GamePLAN.

As the search and admissions process unfolds for the typical family of a college bound high school student, there comes a tipping point.

When the student shows up on the radar of colleges (after taking the PSAT), he/she is inundated with a variety of direct marketing messages.

All of them proclaim: “Come on in, the water’s fine!” The issues of cost and financial aid is typically glossed over.

Mom and Dad are usually left out of the loop in this process, until the question arises of how this college education is going to be funded. This is the moment when the word “scholarship” raises its head, and there is a (usually online) scramble to search for the so-called “millions of unclaimed private scholarship dollars”.

In fact, the student may already have received online solicitations to subscribe to a scholarship search program, if her name has found its way into the database.

The journey towards a college degree is littered with red herrings, and this section of the road is no exception.

After many years in the trenches, here is our advice to parents and students alike …

First, understand that there are three breeds of scholarship:

• National private scholarships
• Local community scholarships
• Merit based college/university funded scholarships and grants

In our experience, there is real confusion regarding the nature of each type.

It’s really important to make the distinction and decide your plan of action.

National Scholarships (Our least preferred)

If you receive a direct mail solicitation to engage in a search for private scholarships, be wary.  Although there are some reputable companies conducting data base searches for private scholarships, most of these companies provide little or nothing for the money they ask you to spend.

They are also frequently part of some marketing ploy, and are not looking to benefit the individual student.

If you decide to go down this road nevertheless, good luck, and here are some pointers:

• Search for private scholarships – FREE.
• Start with fastweb.com and you’ll find plenty - if you are willing to invest a little (and we mean A LITTLE time).
• Don’t get bogged down looking for scholarships in the private sector,
• Pay attention to the deadlines - They are non-negotiable.
• Contact a state student loan guarantor - They can search the College Board data base of private scholarships – FREE!
• Spend no more than 6-8 hours on this process.
• Be sure to start investigating these programs early in the junior year of high school.
• Be prepared for a multi-layered competition that could take over a year.

Remember - some 2,000,000 students apply to college every year, and a huge number of them are looking for private scholarships too. The number of applications these national scholarship providers receive is staggering.

The chances for success are between slim and none in the national private sector, and slim usually leaves town early.

This is a good time to start thinking about “ROI” – time and resources invested versus potential return.

Community Based Scholarships (A better option)

• Stay local.
• Don’t invest too much time (see “Merit Scholarships” below).
• Contact the Guidance Office at your school. Most keep a list of local community scholarships for which you can apply during your senior year.
• Your guidance office may also have more detailed information and application forms.
• Pay attention to the deadlines. They are non-negotiable.
• Don’t get your expectation level too high.
• Don’t ignore your local civic and charitable groups.
• If you are to be awarded some private money, they are most likely to be your benefactors.

Important Note

You are obliged to notify colleges that offer you financial aid that you have been awarded a private scholarship. 

The college in turn may adjust the amount they awarded you to keep the total aid within your calculated need. In that case, you have no net benefit.

And remember, this type of scholarship is typically a one shot deal.

Merit Scholarships - Where the “real” money is.

This is your best strategy:

• Give high priority to colleges offering MERIT SCHOLARSHIPS (mostly academic, but also for performance in arts and special interests).
• This means paying very careful attention to your college search and the essential attributes of those colleges and universities on your refined and final list.
• Focus more time getting the details about these awards than you do on the private sector awards, and you will be way ahead of the game.

The college-based merit awards are usually higher, and they are renewable from year to year.

The probability of receiving a merit award, especially from a college where you fit the top 10-20% profile of the admitted students is much higher than your chances with third party scholarships. 

Keep in mind these funds are not portable.

In other words, should you decide to change colleges, you cannot take your merit scholarship with you and comparable money for transfer students (at your new school) will be extremely limited. 

Give your college search serious thought. Do not commit to a college light-heartedly.

The ultimate costs could be in the tens of thousands of dollars should you decide to transfer.

The key to a successful campaign is to start early and lay out a clear plan involving all the stakeholders (student, Mom and Dad).

Comments

[Kevin]

Good work on pointing out how a lot of scholarship research services are actually ploys to take money from you.

There are tons of merit scholarships based on ethnicity, organizations, religion, etc.

[Budgeting in the Fun Stuff]

I made the mistake of wasting hours on national scholarships...

Luckily my SAT scores prompted a few colleges to offer me large merit scholarships. I'm a fan and suggest to all high schoolers to do as well as possible with standardized tests! :-)

[Simple in France]

great post! I'd emphasize (as a former high school teacher) that you should really hesitate before applying for any scholarship that has a fee to apply!!!! These pop up at times and are sometimes even advertised by unwitting schools.

Merit based scholarships are a good one. Make sure the schools your child applies to offer some too (some highly competitive schools do not!)

Also, consider negotiating with the University. We did this when I went to college. My scholarships didn't quite cover the costs and the school asked my parents to pay a small amount. We contacted the financial aid dept and said we couldn't afford it. . . they found me another scholarship. (but, in fairness, we really couldn't afford it. . . still, it is worth a try if that's your case.)

[Shane Dunn]

Thanks for the info, my kids are heading down this road soon. I will pop in again.