How Do Scholarships Help Pay for College?

I'm trying to understand how scholarships can help with paying for college. I know they can make a big difference, but I'm not sure of the specifics. Are there different types that cover different costs? Any advice is appreciated!

You're right on the money when you say scholarships can make a big difference in paying for college! Scholarships, in a nutshell, offer free money that you don't have to repay and can be used to cover a variety of college costs, from tuition and fees to housing, textbooks, and other living expenses.

There are indeed different types of scholarships. Here are a few common ones:

1. Merit-based scholarships: These are awarded based on a student's academic, artistic, athletic, or other abilities, and often factor in an applicant's extracurricular activities and community service record.

2. Need-based scholarships: These are awarded to students with financial need. The institutions or organizations awarding these scholarships often consider the expected family contribution (EFC) when determining eligibility, although now it's changing to the Student Aid Index (SAI).

3. Institutional scholarships: These are offered by the college or university a student is attending. These scholarships may be merit-based or need-based, and some schools may also offer scholarships tied to specific majors or departments.

4. External scholarships are offered by private organizations such as corporations, nonprofits, religious groups, and others.

5. Scholarships for specific groups: There are scholarships available for students who belong to certain ethnic, religious, or even career-related groups. For example, a number of scholarships exist specifically for minority students, students planning to enter a certain field, first-generation college students, etc.

6. Local scholarships: These are typically sponsored by local businesses, organizations, clubs, and others in a student's community. They tend to be smaller but also less competitive.

What's great about scholarships is that they can stack. Say you receive a merit-based scholarship from your college and you also won an essay contest from a local organization. This total sum will decrease the amount you must pay out-of-pocket. However, do be aware that if you receive financial aid, some colleges may reduce your aid package if you receive scholarships from outside sources. This is referred to as "scholarship displacement" and happens when a student's aid and scholarship amount exceeds the college's cost of attendance.

Pro-tip: Applications for scholarships often involve some form of essay writing. You'd do well by telling your unique story, and always be sure to proofread and revise for the best chance at winning.

Remember, every little bit helps! So you should still apply for scholarships even if they're just for a few hundred dollars. It all adds up.