When private scholarships go to 529 plans

The largest chunks of scholarship money available to help students pay for college comes from the federal and state governments, and from the colleges themselves. But students can also apply for “outside” or “private” scholarships offered from private companies, foundations, community organizations, churches and other benefactors. Rather than simply writing a check to the scholarship winner, some of those providers will offer their awards as contributions to the family’s 529 college savings plan. There are several financial advantages to this, and expert Mark Kantrowitz explains them well in his recent piece, “Advantages of receiving scholarships through a 529 college savings plan.”