If you've earned a scholarship, congrats! Now it’s time to put that money toward tuition and other education expenses.
How private scholarship money is distributed
Private scholarships may be sent directly to your college account or directly 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 in your financial aid offers. 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.
Grants are distributed similarly to scholarships
Generally, college grants are free money from the government that are awarded to you based on financial need. Grants are paid directly to your account at your school; any leftover money is then given to you directly for other expenses.
Along with federal grants there are also grants issued by your state and 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.
What happens to leftover scholarship money
If you earned scholarships and grants that add up to more than your total cost of attendance, your school may send you a refund of the leftover scholarship money. Keep in mind, you may have to pay taxes on that amount. Ask the financial aid office at your college and talk to a tax advisor to 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, a laptop, lab equipment, housing, and more.
Scholarships can be conditional
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. That means, for instance, if you 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.
Scholarships and 529 college savings plans
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 tax advisor to make sure you are withdrawing the appropriate amount.
Finding scholarships for college
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.