As part of their extensive PR efforts, businesses and organizations fall all over themselves to demonstrate civic engagement. And dumping buckets of scholarship money on college-seeking students is one of their go-to methods for doing just that.

That’s a pretty picture, isn’t it?

Especially if you’re applying to colleges with sticker prices breaking six figures for four or more years. But before you go through the hassle of prepping dozens of scholarship applications—and believe me, “hassle” is putting it lightly—you should ask yourself three questions to decide if it’s truly worth the effort

How will outside scholarships affect my need-based award?

Chances are, if you’re considering outside scholarship opportunities, it’s because you’re concerned about affording college altogether. And that means you’re probably applying for need-based aid.

While every college accounts for outside scholarship differently, the long and short of it is this: if you receive an outside scholarship, your level of need is no longer as high. So instead of a net gain, your outside scholarship could actually replace need-based aid for which you already qualified.

In general, outside scholarships are usually counted against unmet need first, then self-help items like loans and work study, and lastly grants.  Each college employs a different policy though, and it will be up to you to learn when you’ve reached the point of diminishing returns.

Are the odds good?

You may be a perfect candidate for a particular scholarship, but many outside scholarships have criteria broad enough for thousands of perfect candidates. As a rule of thumb, local scholarships from community organizations are likely safer bets than national offerings from big name companies.

Sure, high profile scholarship programs (like Best Buy’s, for instance) may offer 1,100 scholarships worth $1,000 each, but how many applicants are they vetting to put up numbers that big?

And we’re only talking $1,000, here; that’s just a drop in the bucket. You’ll likely be banking on multiple scholarship wins to reduce the cost of college by any significant amount. Which means you can’t treat this like a normal application process. You’ve got to approach it more like a sweepstakes: more entries, more chances. It’s a gamble of your time—a high school senior’s most precious resource.

Is it renewable?

Even if you have unmet need, even if you judge your odds favorable, most students completely forget to ask “is it renewable?” In other words, is this a one-off award, or can you plan on it being there each subsequent year you’re in college? Unfortunately, the vast majority of outside scholarships are not renewable.

So, let’s say you receive $5,000 in outside scholarship, and then let’s assume the school lets you add it all to your financial aid package without reducing any of its assistance.

Now, pretend that the $5,000 isn’t at your disposal. Can you still afford the college? Because that’s the position you could be in your sophomore year, and your junior, and your senior…and your fifth year if something goes amiss.

Outside scholarships can distort your perception of long-term college costs if you don’t account for them at the outset.


I generally council families against investing much time in outside scholarship applications. Their time is much better spent applying to special scholarship programs at their colleges of choice where money is used to incentivize enrollment. What’s more, these awards are typically renewable and package nicely with other financial aid from the school.

So, apply with caution; your time is valuable. Spend it wisely.

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    I have read your whole article, in some points I am not agree with you. Those students who have the dream to study in high rank college but dont have the capacity to bear the expenses, badly needed the scholarship. And for this they are ready to face whatever hassle come on their way.

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