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Do you want free money for college?

Apr 08, 2021

Who doesn’t want free money for college?  Some canny students have paid their full college bill using third-party grants and scholarships.  The more you find, the less student loan debt you are likely to take.

Sources of free college money

There are two primary sources of free-money, grants and scholarships for college:

  • The federal government, states and colleges
  • Other “third-parties” including:
    • Employers
    • Private scholarship provider

Aid from the federal government, states and colleges

The largest provider of need-based student aid is the federal government. The Office of Federal Student Aid provides more than $120 billion per year of grants, work-study and loans per year.  Eligibility for this aid is determined by filing the Free Application for Federal Student Aid, a.k.a. the FAFSA.  Colleges use the FAFSA information when considering how much financial aid to offer. If you use this free Financial Aid/EFC estimator, you will see that need-based financial aid eligibility is heavily dependent on income.

Colleges also award scholarships based on merit. Merit scholarships for academic excellence, athletic prowess, artistic talent, and many other reasons, including geographic diversity, as a way for colleges to round out their freshman class. These awards are often made without the student filling out a special application, so they are pleasantly surprised when they open the award letter and find free money inside.

What can students do if the aid package from the federal government, states, and colleges is not enough to make the school affordable?

In addition, to need and merit-based financial aid from the government and colleges, scholarships are awarded by hundreds of different organizations: employers, large national foundations, local charities, credit unions, banks, community clubs and others offer free money to college-bound students. Each year, industrious students as young as grade school compete for the billions of dollars of contests, prizes, and scholarships offered by private third-parties.

One issue with these scholarships is that there is no standardization with the process. Each provider is likely to have different requirements and application processes.  However, most scholarship applications include an essay, personal statement or a resume, and something related to the nature of the scholarship. 

While searching for free money from third-parties, be creative and inquisitive. There are prizes, contests, and scholarships for just about everything from serious endeavors such as winning a national spelling bee or playing the piano to the fun and creative such as making prom attire out of duct tape or doodling.  There are scholarships for left-handed students, for people who’ve worked in an ice cream shop, and for students who have overcome specific hardships. Those are just three examples; if you can think of something you enjoy or take part in, there’s probably a scholarship out there related to it.

How to find contest, prizes, and scholarships sponsored by third parties

  • School Counselors.  Check with the high school counseling office. School counselors are a particularly rich source of information for local and state scholarships.  They know the sponsors, the criteria, and the student’s profile to quickly direct students to scholarships in the student’s area of particular strengths.
  • Online scholarship search services. There are many online scholarship search tools offering to connect a student with billions of dollars of free money.  This free scholarship search tool at permits you to search using a number of filters including one called “Success Rate.”  The Success Rate filter permits you to see what percentage of applicants were previously successful when applying for an award.  There are some awards which gave scholarships to everyone who applied (100% success rate).
    • Some scholarship search tools (not the one at require an email address to enter the site. You may want to read their Privacy Policy and Terms of Use to see if they will sell your email address to other marketing companies or colleges. Often, users who register will receive scholarship updates that can be helpful.  On the other hand,  some search tools bombard your in-box until you unsubscribe. One site continued to send a user periodic updates announcing that the student was eligible for a scholarship many years after she enrolled in college.
  • Look in a book.  In either digital or print editions, this old-fashioned approach still works really well.  The authors of The Ultimate Scholarship Book 2021: Billions of Dollars of Grants, Scholarships and Prizes pieced together more than $100,000 of scholarships to graduate from college debt-free.
  • Check with Employers.  Sometimes a parent’s employer might sponsor a scholarship for the children of employees – a great opportunity for free money and source of pride for parents!

Tips for applying to scholarships

  • Stay organized. Students will likely need to collect transcripts, records of awards/honors, and/or letters of recommendation.  To make the process more efficient, sift through each of the application requirements to find similarities among them. Many times, essays and personal statements may be slightly modified and reused on another application.
  • Track deadlines carefully. The deadlines are hard and fast so be sure to keep track of them. Keep an organized calendar of deadlines, allocate time wisely and avoid being overwhelmed at the last minute. 
  • Be smart about applying. Since there are many scholarships choose from and often many applicants, it is wise to do the homework and pick those for which you will be particularly competitive.  Also, consider the number of awards a provider will likely make, the number of applicants in prior years and the dollar amount of each scholarship.  Your obvious goal is to find scholarships that: 
    • have not previously attracted lots of applications
    • offer enough money to make it worth your time to apply and 
    • align with your interests or aptitudes. 
  • Keep looking while in college. There’s a big focus on scholarships for freshman year, but a tendency to forget about them after that. Continue to place an emphasis on applying for scholarships throughout college. If you’ve been awarded a scholarship and are eligible to win it again, be sure to continue applying each year.

Here’s what not to do:

  • Pay a third-party.  With the abundance of free resources, there is no reason to pay a third-party to search for scholarships for you. 
  • Pay a fee to file a scholarship application.  Scholarship “entry” or “administrative” fees often signal a scam.  Steer clear of them. 
  • Assume you will not be eligible.  Sometimes third-party scholarships go unclaimed.  Usually, these awards are offered by sponsors with very specific criteria, perhaps a certain ethnic or religious background majoring in a specific discipline or the children of military veterans with other criteria. 

How could third-party scholarships affect financial aid? 

Sometimes, financial aid can be reduced dollar for dollar for each dollar secured from a third-party scholarship, grant or prize. Check with the financial aid office to understand how a third-party scholarship will affect your financial aid eligibility. And be sure to read the fine print to understand the terms of the awards and ask good questions: Is the award for each year in college or just the freshman year? Do you need to reapply each year? Are there any other requirements to maintain the scholarship?

For many students, third-party scholarships are certainly worth pursuing – even if a college decides to off-set some aid by the amount of scholarship money earned.  

A Final Thought

Students have a variety of options to pay for college.  The combination of need-based and merit aid is too often also not enough to permit students to pay the full bill.  Students can search for grants, scholarships and prizes to fill the gap and reduce the need for additional student loans.