Flickr user Krissy Venosdale
Outside scholarships are financial aid awards that help you fund your college education. Instead of coming from your college, they come from third party organizations, such as businesses or nonprofits. Since you don’t have to pay scholarships back*, they can be a great way to help pay for college.
What Is an Outside Scholarship?
An outside scholarship is any college scholarship not awarded by a school or the government. Instead, they’re offered by businesses, nonprofits, individuals, and other organizations. You might also see them referred to as “private scholarships,” since they often come from private sources.
Scholarships from colleges and universities are called institutional scholarships, grants, or financial aid. Awards from the government are federal grants or state grants and scholarships.
How Do Outside Scholarships Work?
As with other scholarships and grants, you don’t have to pay outside scholarships back*. However, qualifications and award amounts vary depending on the award and organization. One scholarship worth $100 might be open to everyone with no essay required. Another might be worth $10,000 but only reserved to those pursuing a communications major. Some are also renewable, meaning as long as you continue to meet the criteria, you’ll receive cash each year you’re in college.
In addition, outside scholarships might have limitations on how you can use the money. Some dictate that you can only put the money towards education expenses, including tuition, room and board, and meal plans. If you are caught spending the money elsewhere, you might have to pay it back. Others hand you the cash and allow you to decide how to spend it. Always read over the fine print when accepting a scholarship to make sure you’re adhering to the rules.
How To Find Outside Scholarships
You can find outside scholarships through a variety of sources, including your high school, local businesses, national companies, church groups, charitable foundations, associations, and more.
However, locating these awards on your own is difficult. First, you need to track them down. Then determine whether you qualify for the award. It’s time consuming and tedious.
Instead, we recommend using a scholarship database. These programs take your information and find awards you qualify for. You can track your applications and save scholarships to apply to later. If new scholarships appear that fit your information, you’ll receive updates or an email letting you know you can apply!
How To Apply
How to apply to an outside scholarship depends on the organization. Some might only require your contact information, while others ask for an essay. Awards could even ask for pictures, artwork, videos, proof of college enrollment, and more. They’ll also have varying criteria and deadlines.
In addition, scholarships based on financial need may require proof of financial need, such as your Student Aid Index (SAI). You can only get this number by completing your Free Application for Federal Student Aid (FAFSA). Even if you don’t think you qualify for federal aid, it’s always worth completing! Many institutional scholarships, even those not based on financial need, require your FAFSA (or CSS Profile).
The organization’s website or informational sheet should explain what they’re looking for in an applicant, how to apply, any important deadlines, and what’s expected of you should you win. If you have any questions, reach out to them before you apply.
Why Do I Have To Tell My College if I Earn an Outside Scholarship?
Should you win an outside scholarship, let the college know right away. Colleges base financial aid packages on need. If the money from your outside scholarships exceeds your need, the school has to lower the amount of need-based financial aid they give you. If you fail to notify them, you could have to pay the money back to the school.
Outside Scholarships, College Policies, and Your Financial Aid Package
To account for the outside scholarship, the school could reduce the loan amount or the institutional grant total. Reducing the loan is ideal, as this means you’ll pay less down the line.
However, if the college reduces the institutional grant (known as scholarship displacement) rather than the loans, it could impact your decision on whether you attend the college. If you compared your financial aid offer letters after a scholarship displacement, does your first choice school still make the most financial sense? You might now have a better offer from another college, especially if the other college reduces the loan total rather than the institutional grant total. And you’ll be able to take that outside scholarship with you.
Some states, including California and Maryland, ban scholarship displacement. Your college’s website should detail their policies regarding outside awards. If you can’t find the information, contact the financial aid office.
Outside scholarships are fantastic opportunities to help pay for your higher education. They have deadlines year-round, and they’re not limited to just incoming first year college students! It’s literally free money, and many only take a few minutes of your time.
Want to find outside scholarships to apply to that you qualify for? Use our free Scholarship Search Tool today to get started.
*While a scholarship does not have to be repaid, there may be other obligations associated with the scholarship.
