The truth about outside scholarships for college

I did a financial aid seminar for our Collegewise families last weekend and talked a little about "outside scholarships,"  which are little-known awards or scholarships from private companies and foundations.  Families are often given the impression that there is a lot of money available from these sources if you're able to find it.

But according to Paying for College Without Going Broke, the money from outside scholarships accounts for only about 5% of the aid that is available.  The author points out that the biggest chunk of scholarship money comes from funds provided by the federal and state governments, and from the colleges themselves. 

So, is applying for outside scholarships even worth a student's time?  It's not an easy question to answer.  Even if the amount of money available is comparatively small, free money for college is always a good thing.  So here's how I recommend families consider that question.

Applying for outside scholarships is a time consuming process.  Kids have to research and find the scholarships, fill out the applications, and often write essays, get additional letters of recommendation and maybe even interview. So, let's say your student took the time to find and apply for 20 outside scholarships and won $500 – $1000.  Would you think it was worth your student's time and effort? 

If your answer is, “Of course!", then you should consider having your student apply for outside scholarships. 

If, on the other hand, you'd feel like a $500-$1,000 return on your student's investment of time and energy just wouldn't be worth it, you might reconsider and have your student spend her time studying and playing on the soccer team.

Of course, my figure of $500-$1000 is an arbitrary one; your student might win more or less than that.  But our experience with our Collegewise students has been right in line with the logic in the aforementioned book; the biggest awards don't come from the outside scholarships.  In fact, I can't recall ever hearing that one of our students won a $15,000 scholarship from a private foundation or company, but we see it happen all the time from the other sources, particularly from the colleges themselves.  

If you do decide to search for outside scholarships, never pay someone to help you find them.  All the information is available to you for free if you're willing to look for it.  Two of the best places to search, and to do so for free, are here:

www.scholarships.com

www.fastweb.com