Outside scholarships: How to get them and how they affect financial aid

Billions of dollars in outside scholarships are available each year, so you might be surprised to hear that college students often have great difficulty in securing one. In this article we explain why, show you how to improve your chances of receiving an outside scholarship, and clear up the confusion over how the award might affect your financial aid.

What is an outside scholarship?

Outside scholarships, also known as private scholarships, are scholarships that are not funded by a student’s college or the government. Entities or institutions that award outside scholarships include: companies, associations, specific groups, and charities. Private individuals may also set up outside scholarships to help students along their educational journey.

How do outside scholarships work?

Outside scholarships are usually aimed at students from particular demographic groups or pursuing particular courses of study. Unlike student loans, the money received from private scholarships does not need to be repaid. You might receive the scholarship amount as a one-off sum, or recurring payments each semester or year. Private full-ride scholarships are rare and usually only a portion of a student’s expenses are covered.

Most private scholarship opportunities can be found online. It pays to keep looking even after the semester has begun because new outside scholarships can be listed at any time throughout the year.

The scholarship application process depends on the private scholarship you are applying for. Some only require your background details and a statement about why you are embarking on this course of study. For others you may need to attend a scholarship interview.

Upon receiving an outside scholarship, there may be some additional requirements, such as attending a certain number of classes or maintaining a minimum GPA.

Why does it seem so hard to secure an outside scholarship?

If you are finding it difficult to secure an outside scholarship you are not alone. Every year thousands of students search and apply for scholarships but are unsuccessful. There are 2 main reasons for this:

1. Billions of dollars in private scholarships are indeed available, but millions upon millions of students are seeking those funds. The supply of outside scholarships cannot keep up with the demand. Therefore, some students – even highly qualified and capable ones – must go without.
2. Outside scholarships often have such stringent qualifications that it can be difficult for anyone to fully satisfy them.

For example, some private scholarships are only available to students at a certain high school. While many would qualify, what if that student could only receive the funds if they went to a particular college? Some students would still probably make be eligible for the funds, but what if the scholarship was only available to them if they went to a certain high school, attended a particular college, and they had to choose a major in a specific area of study?

Unfortunately, you can see how quickly some scholarships can exclude the number of recipients that are able to receive it. The good news is that if you happen to fit the exact demographic, you have a good shot of being granted the scholarship.

How to get an outside scholarship

The demand for private scholarships is unlikely to drop anytime soon and the requirements to get them are likely to become even more stringent. To receive an outside scholarship, the best thing you can do is to hone your skills in locating them. The following tips aim to help you on that mission.

1. Utilize scholarship databases

Check out all the scholarship search engine databases that you can find. These are freely available online, but make sure they are legitimate before you share any of your information with them. A good scholarship search engine won’t ask you your personal information and never charges a fee.

2. Don’t neglect your local neighborhood

There is a tendency to forget that financial aid opportunities can also be found offline. Search your local community for extra private scholarship dollars. Don’t be afraid to knock on doors and visit service-focused non-profits like Rotary, Kiwanis, and Lion’s Club. After that you can move on to local foundations and private organizations. You may be surprised at the number of small organizations who are keen to back talented and committed locals on their educational journey.

3. Widen your search

Once you have filtered through the opportunities from your local community, it is time to start looking at the same types of groups but on a more regional, state, and national level. If the local foundations were unable to help, they may be able to direct you toward – or even recommend you for – private scholarships that accept applicants from further afield.

4. Think about what makes you special

The broader your private scholarship search becomes, the more you need to identify the niche or traits that can help you to stand out from the crowd. The aim is to make yourself the best choice for the specific scholarship opportunity available. One way to do this is to spend extra time on your application, ensuring you are both meeting and exceeding the requirements. This is particularly important when it comes to writing the scholarship essay.

5. Network to discover outside scholarship opportunities

Now more than ever is a great time to call upon your friends and family members to help you find private scholarships. Utilize Facebook, Twitter, family reunions, graduation parties, weddings, or any social medium possible where you can let your network know that you are looking for scholarship money. Chances are someone will know somebody or an organization that can help you out.

To be successful in securing outside scholarships, you need to dedicate some time and make use of your connections as efficiently as possible. The payoff comes when you start to see the private scholarships trickle in and the positive impact on your student budget.

Do scholarships count as financial aid?

A common question is how an outside scholarship can impact the financial aid package you receive from your college or university. Unfortunately, the answer is not clear cut and depends on several different variables (school rules, financial aid package, FAFSA results). Below, we discuss some typical scenarios a student might face.

Offsetting your financial expenses with an outside scholarship

The best-case scenario is that the funds you receive via your outside scholarship help to offset the financial expense you or your family had expected to put toward educational costs. This means that whatever you were expecting to spend on out-of- pocket educational expenses is now reduced by the private scholarship amount. This is probably the most common outcome.

Your federal loan may be reduced due to your outside scholarship

If you are receiving need-based financial aid that has been calculated from your FAFSA application, you may be at risk of losing some of this due to the additional funding from outside sources. A school may, at their discretion, reduce the financial aid package offered to recipients of private scholarships.

You cannot receive more financial aid than the cost of college attendance

If you have been able to secure the necessary funding (scholarships and grants) required to cover all your school expenses, and you decide to go out and find another private scholarship, your financial aid will be reduced by the amount of the new scholarship.

If you find yourself in this scenario, ask your outside scholarship programs if you can defer the award until your second year of college. Chances are that some of them are 1-year awards that won’t be available in subsequent years. You may lose a few, but will no longer be at risk of having your financial aid reduced during the second year because of overfunding.

Concluding thoughts on outside scholarships

Even if you already have an excellent financial aid package, an outside scholarship is likely will in most cases benefit you. Once you’ve figured out which colleges to apply to, it behooves you to start researching the best private scholarships as soon as possible. You’ll be grateful for this when you arrive on campus and realize that every dollar counts in making college more affordable.