What you’ll learn
If you earned a scholarship, congrats! Now it’s time to put that money toward tuition and other education expenses.
Private scholarships may be sent directly to your college account or they may be sent to you in the form of a check or direct deposit into your bank account. If you win a scholarship and you’re not sure how you’ll receive the money—just ask.
Your college expects you to tell them about any private scholarship money you’ve won. The schools take into account any private scholarships you may have been awarded and you may see that reflected on your financial aid award letters. Carefully review them to decipher what you are getting.
Pro tip
Call your college and find out how private scholarship dollars are applied. Ask if other forms of financial aid will be reduced or eliminated due to a private scholarship
Generally, grants for college are associated with free money from the government based on financial need. These awards are paid directly to your account at your school.
But there are also state grants, or grants issued by your university with conditions such as maintaining a specific GPA. Pay careful attention to the amount of grant money you receive and be sure you understand if you’re receiving it for one year, or for all years of college.
If you earned scholarships and grants that amount to more than your total cost of attendance, your school may send you a refund. Keep in mind, you may have to pay taxes on that amount. Have the financial aid office at your college help you calculate the taxable portion of your scholarships.
Remember, scholarship money can be used to pay for any education expenses deemed necessary by your school. This could include books, laptops, lab equipment, housing, and more.
If you’re lucky enough to get a scholarship that gives you money for more than one semester, conditions such as maintaining a certain GPA might apply. You also may end up with divided distributions. For instance, you could have a $5,000 renewable, annual scholarship from your college—you’ll get $2,500 toward tuition and fees applied to your account each semester.
529 college savings plans charge taxes for funds withdrawn for anything other than qualified education expenses for the beneficiary (the person chosen by the account holder to use the funds).
The exception to this rule is if money is withdrawn in an amount equal to a scholarship received by the beneficiary. Since the penalty can be stiff, always double check with your plan to make sure you are withdrawing the appropriate amount.
You don’t need to be number one in your class to win a scholarship. You can find scholarships for college based on your skills, hobbies, ethnicity, and more.
Remember, scholarships aren’t just for high school seniors. There are scholarships for college students, too. Apply each year you’re in school.
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Having your scholarship dollars awarded is the lap around the bases you’ve been waiting for. Be sure you understand how your scholarships work and then enjoy your achievement!
Reyna Gobel is a journalist, author, professional speaker, and educator who's been quoted by Money Magazine, Real Simple, and The Washington Post. She’s spoken at hundreds of colleges across the country about student debt—and she’s the author of "CliffsNotes Graduation Debt" and “CliffsNotes Parents’ Guide to Paying for College and Repaying Student Loans.” Reyna was compensated for this article.
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