Outside scholarships can be a great way to stretch your college budget. And sometimes they offer more than just scholarship dollars: my daughter receives an outside scholarship that includes a career mentor who helped her find an internship that led to a full-time job offer when she graduates this spring. Outside scholarships can also be an exercise in frustration with countless applications yielding small dollars. Knowing the 5Ws and H of outside scholarships can make your search more rewarding.

Let’s start with What is an outside scholarship? An outside scholarship is a scholarship offered by anyone other than the college the student attends. Some are one-time scholarships; others are for all four years or are renewable annually. These scholarships are treated differently in aid formulas than institutional scholarships offered by the college.

How? Outside scholarships have their own place in the aid formulas. They are treated as student income for the school year in which they’re received, not prior-prior year as with income from a job. That means that an outside scholarship received in the student’s senior year is treated as income for senior year. The Department of Education requires colleges to reduce need-based financial aid by 50% of the value of outside scholarships the student receives. The college can reduce any form of aid offered to the student—grants, work study or loans—so the impact can vary. Nonetheless, a need-eligible student is likely to only get half the value of their outside scholarship. This means that applying to highly competitive, low dollar-value scholarships might not be a good use of time.

Where do you find outside scholarships? Websites with huge databases of scholarships abound—Fastweb, the College Board and Bold.org are just a few of the many websites that allow you to search national databases of scholarships for which you might be a fit. National databases attract national applicants, though, meaning that many of these scholarships are highly competitive. That doesn’t mean you shouldn’t apply; many have very specific criteria that limit the applicant pool, and others have pretty straightforward applications.

A better strategy for many students is to look closer to home. Because Who offers scholarships? Tons of local organizations, individuals and employers including club or high school sports programs, after school activities, alumni of your high school and perhaps even your employer. These types of scholarships tend to get less applicants simply because a smaller pool of people is eligible for them. Better still, in many cases the student is already a known entity to the scholarship giver.

Where else do you find these scholarships? Your high school guidance counselor or college and career center probably has a list, so that’s a great starting point. Teachers often know about scholarships related to their field or areas they’re engaged with, too. And check with your HR or benefits department at work, as well as any activities or groups your student participates in. My daughter found a terrific outside scholarship through a teacher who runs an extracurricular program she participated in. Another student I worked with competed in beauty pageants and found that many of the companies sponsoring pageants offered scholarships beyond those awarded to pageant winners.

When do you apply for outside scholarships? Many scholarship applications are open to students in earlier years of high school, meaning a trip to the college and career center in freshman or sophomore year can be a worthwhile activity. In fact, some are only open to students who are not yet high school seniors, though the majority tend to be available to seniors. The timing can cause some budget challenges, since students sometimes haven’t heard back from scholarships when they’re deciding which college to attend. All by way of saying, this is something to do now if you haven’t already.

If you’re reading this, I probably don’t need to tell you Why: outside scholarships are free money. Not only that, but many provide additional benefits beyond the scholarship dollars. My daughter’s scholarship, for example, includes an annual technology gift (a laptop one year, an iPad another) and a career mentor. The career mentor led to a summer internship and now a full-time job offer.

So, hit your school’s college and career center and start researching your and your student’s network for outside scholarships. Chances are you’ll find some good ones.

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