Scholarships 101

A scholarship, as distinguished from a student loan, is money given that does not have to be repaid. There are scholarships for academic high-achievers, athletes, Pacific Islanders and children of local widows. In short, there is a type of scholarship to suit any possible circumstance.

The trouble is finding them.

Most scholarships are academic oriented. They require excellent grades. But that is often just the first cut. In order to win out over those with similar GPAs or SAT scores, the student often has to have other elements in his or her background. Sometimes that’s an award from Westinghouse or other science-based competition. But it could be having a history of community service. The variations are endless.

One of the easiest ways to get started is to speak with a school counselor, to find out what’s available. But take what they say with some skepticism. They’re often overworked and not aware of the latest information. Continue that research by doing some web searches and dig into the thousands of possible scholarship programs.

Two of the larger sites that have massive, up-to-date information are FastWeb (www.fastweb.com) and CollegeAid.com (www.collegeaid.com/college-scholarship-search.html). Both have long lists of scholarship programs with amounts and a brief blurb on application requirements or criteria. In some cases, the initial criteria are as simple as having (or expecting soon) a high school diploma and being a U.S. citizen. Others require acceptance at a university and a specific residence.

There are scholarships for the children of veterans, for those who intend to major in Health Sciences, or those who are residents of Virginia, just to name three. Most require good grades, but not all. Many require the student to be from a low-income family, but others look to ethnicity. In other words, they cover the entire spectrum of possibilities.

Some scholarships require evidence of more than just an outstanding grade point average or good test scores, or facts about personal background. Some will require that the prospective winner write an essay, as short as 250 words or as long as 5,000. The essay may be oriented toward listing personal achievements or merit, or the grantors may want to find out the prospect’s views on the world. Here again, they run the gamut.

Most scholarships are free, in the sense that the money never has to be repaid. But it isn’t always the case that the recipient receives or gets to keep the entire official amount. Some are taxable. According to the IRS, the following criteria apply to scholarships, with respect to taxability

Qualified scholarships and fellowships are treated as tax-free amounts if all of the following conditions are met:

- You are a candidate for a degree at an educational institution,

- Amounts you receive as a scholarship or fellowship are used for tuition and fees required for enrollment or attendance at the educational institution, or for books, supplies and equipment required for courses of instruction,

- The amounts received are not a payment for your services.

See also http://www.irs.gov/faqs/faq4-8.html

The only way to find out what’s out there, and if you’re qualified or have a chance to receive one, is to dig into the different programs and start applying. It’s a lot of effort, but it just proves once again that there really is no such thing as a free lunch. Good luck!