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  • Jason Flurry, CFP

Are private scholarships worth it?

The truth about the world of private scholarships and financial aid

I get a lot of questions about scholarships. People want to know what to apply for and when to start applying. And usually the scholarships people have in mind often include private scholarships offered by some company or organization outside of the college itself.


There are tons of these kinds of scholarships available – something for everything under the sun. Over the years I’ve heard about a left-handed scholarship you can apply for if your students are left-handed. I’ve heard of a tall scholarship if your student is over a certain height. I even had a student tell me a couple of years ago that she found a scholarship that awarded you money if you didn’t attend your senior prom! I don’t know who funds all the scholarships, but whatever your situation is, you can probably find something out there that matches up with it.


More than the question of what should you apply for, just as important is understanding when to apply for it. Unlike scholarships that are offered directly by colleges and universities, most private scholarships are offered year-round. That means there is usually something available to apply for all the time. And, although they do usually have deadlines for their applications, there’s usually not an application fee associated with applying, like colleges charge when you apply for admissions. If you have the time and interest, you can apply for as many of these scholarships as you’d like as often as you’d like. And that’s exactly what a young man named Christopher Gray did.


The Million Dollar Scholar Christopher was the eldest of three children being raised by a single mother in Birmingham, AL. He was a good student, ambitious, and a hard worker, but as Christopher began approaching his final years of high school, he started realizing just how difficult making college affordable would be for him and his siblings. His mother had just lost her job at a call center in the 2008 recession and no one in his family had ever gone to college.


Without a computer at home, Christopher would head to the public library where for seven months he worked on library computers in 30 minute blocks to research private scholarships. It was a stressful, grueling process and he often had to wait for an hour or more just to have access to one of the handful of computers his local library had.


But, his hard work, determination, and diligence paid off. Before he was finished, Christopher had won $1.3 million in college scholarships. He was the million-dollar scholar!


Here’s something very important about Christopher story too. In addition to winning all of this money, Christopher also catalogued everything he had applied to as he went. And, once he got to Drexel University where he ultimately decided to attend, he took that catalog of private scholarships and created an app called Scholly that organized the world of private scholarships and made it easier for anyone to improve their chances of success, just like he did.


You may have seen Christopher on the show Shark Tank where he got the attention of multiple sharks and raised the money and support he needed to take his idea mainstream. And here’s the best part. It only costs a few dollars a month to use Scholly. So if you’re looking for anything in the world of private scholarships, this is the only way to go! It’s very organized, easy-to-use, and super-efficient.


Finding the REAL money Naturally, some of the scholarships you’ll find there are our lead generation type of scholarships where someone is trying to collect contact information in exchange for the hopeful promise of a college scholarship. But, there also many more legitimate offers made by companies and organizations who get anywhere from tens of thousands of applications to may only be a few dozen. If you can find one of those offers where there may not be nearly as many people standing in line, your chances of winning a scholarship like that can go up tremendously. And, every little bit helps, right?


Now as wonderful as Christopher’s story is, and as real as the potential is to pay for college with private scholarships you find through Scholly or otherwise, let me put all of this in perspective for you.


Each year there’s over $327 billion available to help families pay for college and the majority of it breaks down between the federal government, individual states, and the colleges themselves. In fact, those three areas, the government, states, and the colleges, make up 99% of all the money that’s available to pay for college each year.


That leaves private scholarships to account for just 1%.

And here’s the other part you need to know. Most of these private scholarships are one-time only awards compared to merit scholarships from the colleges, which are usually four year renewable awards. Unless your financial situation changes a lot from year to year, even the need-based award you win from colleges are typically renewable each year, even though you have to apply for them again on an annual basis. Those dollars are reasonably predictable and helpful in the planning process as you’re trying to determine how much of the college bill you’ll actually be paying. With a private scholarship though, you never know if you’ll be able to win it again next year or the next year after that.


And here’s one more thing most people never consider. If you do qualify for financial aid because you have a financial need at a particular college, and then you also win a private scholarship from some outside source, the college will usually say, “Hey, congratulations - Now that you have their money, you don’t need our money.” In other words, they can and do offset financial aid grants they would normally provide to students with the funds you receive from outside resources, like private scholarships. That leaves you in the same place you would of been in had you only applied for financial aid with that college. In those situations, all of that hard work and effort to hunt down private scholarships gets lost in the mix.


The shortest distance between two points I’m not saying private scholarships are bad. We’ve had clients win private scholarships and stack them on top of merit awards they’ve received, even to the point of being cash flow positive to go to college. Just like Christopher Gray’s story, you can be making money to go to college with the right combination of scholarships and grants. But, also like Christopher Gray story, you can overdo it. Let me explain.


Because Christopher came from a low income family, he would have likely qualified for a large amount of need-based aid at most of the colleges where he applied. There is a point where more scholarships aren’t that helpful. And, since those donors who fund private scholarships want that money to be used for education, many will not pay the funds out to you directly. In Christopher situation, he’s paid up all the way through his PhD - and even then he will have money left over he can leave as a legacy scholarship to other students who want to attend his particular college. While that is pretty cool, he could have had a very similar outcome on a personal level through traditional financial aid sources and saved himself a lot of time and work had he only known better.


So like I said, private scholarships aren’t bad and it’s not like you should avoid them. Just plan on using them last as a way to complement any of the merit scholarships you may earn. Remember, private scholarships do make up just 1% of what’s out there, but that’s 1% of over $327 billion, so it still a lot of money!


Do your homework and learn what the colleges on your list are looking for in an ideal applicant. See what kind of recruiting scholarships they have available and then reverse engineer your student to be the logical choice for those schools so the colleges will pay you to choose them over the competition. That’s the way we’ve been able to get $40,000, $50,000, and $60,000 type awards for our private clients each year. And that’s without having to rely on private scholarships at all!


Choosing the right coach The money you want is out there if you just know how to get it. And nobody knows more about how to get it than a College Planning Specialist. If you’re curious about private scholarships, check out Scholly when you have a chance. And if you’re serious about learning how to capture more of the real money that’s available to make college affordable, get in touch with me or search for an experienced College Planning Specialist in your area. Although there are only 30 to 40 true College Planning Specialist in the country, any of them can likely get you better results than working with a regular college planner, using an advisor affiliated with your high school, or by trying to do everything on your own.


College is expensive, but with the right game plan, the sticker price doesn’t have to be your price. Learn how to become an educated consumer when it comes to paying for college and get help when and if you need it. Your students may never be million-dollar scholar like Christopher Gray, but knowing that you’re only paying your fair share of the college bill will make you feel like a million bucks just the same!

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