Admissions Process

When it comes to the entire financial aid pie – including federal loans, federal grants, tax credits, collegiate resources and state aid – private scholarships account for a little more than one percent. Federal loans and grants, on the other hand, make up almost 60 percent of all financial aid. The point is: don't make scholarships your number-one priority – head for the big slices of pie before you search for crumbs.

Most people assume scholarships put money directly into their pockets. That is not how the system works. For example, if you complete your Free Application for Federal Student Aid (FAFSA) and learn your Expected Family Contribution (EFC) toward college costs will be $7,000 per year. If your top choice school, Nirvana State, costs $12,000 per year and based on your EFC, you have an aid package of $5,000.

One lucky day, you win a $1,000 scholarship. Now your contribution will be $6,000, right? Wrong! Nirvana takes the $1,000, as well as your family's $7,000 expected contribution. In effect, your need is $1,000 less so you get $1,000 less in need-based aid.

This packaging may seem unfair, but colleges have little choice about how they use a private scholarship. If the cost of college exceeds your contribution, federal regulations require schools to include that award as part of your family's resources. So is looking for scholarships worthwhile? Yes, if you can convince your school to use the money to replace a loan component of your aid package, instead of a college or federal grant. What if Nirvana State uses your $1,000 award to replace a loan it had planned to give you? That's $1,000 less you'll have to repay after you graduate. What would happen if you won a $13,000 scholarship? Could you use the $1,000 extra to finance spring break? No! You can only receive $12,000 – financial aid cannot exceed the cost of attendance (including room and board); it cannot provide income for you.

Also, if the scholarship exceeds your need, then you do pay less for college. If you won a $6,000 scholarship and you were still going to Nirvana, you would pay $1,000 less.

There may be a "special scholarship" that matches your distinct qualifications – however, there’s a big difference between being eligible and winning. For example, Coca-Cola gets 122,000 applications for its 150 awards; odds of winning, 813:1. ESPN gets 20,000 applications for eight awards; odds of winning, 2,500:1. It is important to apply for federal, state and college aid first. Then, start looking for a "special scholarship." You may even find one.

This claim is usually made by computerized scholarship search companies that hope you will send them $25 to $200 to find those millions that are just lying there waiting for you. We’re sure a few scholarships do go unused every year, but for once, we would like to see some concrete examples of these vast untapped resources. According to most financial aid professionals, the millions you hear about are unused employee tuition benefits. Corporate benefits usually go to employees or children of employees, either in the form of tuition reimbursements or company scholarships. Some corporations do give money to students whose parents aren’t on the payroll. Usually, though, this is done via grants to colleges: the colleges in turn select the recipients – you don’t apply for the money directly. So what is the right route to the student aid process? First, apply (early, accurately and honestly) to all the major assistance programs (federal, state and college) for which you are eligible. They also select colleges that are most likely to present them with a good aid package and discuss with financial aid officers (if appropriate) the possibility of an improved aid package. They become knowledgeable about all the options for financing educational expenses.

And, finally, they look for scholarships.