Essential Facts About Scholarships & College Loans

Essential Facts About Scholarships & College Loans

Scholarships for college study come in a lot of shapes and sizes. In addition to privately sponsored scholarships, there are those offered directly through schools and government agencies. Plus, while a few include relatively sizeable financial support to cover all expenses associated with a four-year education, others are narrower. They offer recipients funds based on continued grade point averages, usually above 3.0 on a 4.0 scale. Additionally, some scholarships are for tuition only, include multiple restrictions, are taxable, or go only to students who pursue a particular course of study.

Refinancing School Debt is a Winning Technique

Most scholarship recipients don't win enough award money to cover the entire cost of a four-year education. That's the primary reason behind applying for loans to cover the shortfall. Among the many grads who walk away from their last day of college with one or more private loans, refinancing is the wisest strategy for getting monthly payments as low as possible. For those who wonder how often can you refinance student loans, it's essential to review a complete guide that delineates all the nuances of how refinancing agreements work and how often they can be renegotiated. Regardless, the main advantage of the process is getting lower monthly payments and potentially better rates, terms, and repayment conditions.

More is Better

Most applicants discover the more is better concept when searching for opportunities. In other words, the more scholarships you apply for, the greater the chance of winning at least some cash for school. When using a search and apply platform, most users attempt to identify at least a dozen opportunities for which they meet the minimum requirements. It's not unusual for individuals to apply for more than 20 awards from a combination of private, school-based, institutional, and other awards.

Targeted Strategy Saves Time

One drawback to the shotgun approach of applying for dozens of scholarships is that the strategy can be time consuming. That's because many organizations require applicants to fill out lengthy essays, each of which can take at least two hours to compose, proofread, and correct. However, utilizing a targeted approach can deliver excellent results.

Editors & Proofreaders Make a Difference

About half of all financial award applications require essays. Regardless of how many opportunities you seek, there's a high probability that you'll need to write at least two essays. The trick for creating top-notch writing is to employ editors and proofreaders. Most students rely on relatives, friends, or teachers to fill the roles. It's not necessary to retain paid professionals, but it is essential to ask one person to serve as a first-tier editor and another to do a final proofing of the document before you submit it along with the rest of the application documents.

Many Awards are Taxable

There's no hard and fast rule about which cash awards are taxable and which aren't, but there is a general rule that can help students get an idea about how much they might owe to the government after receiving a particular scholarship. The IRS typically allows any education-related awards to fall into the non-taxable category. That usually means the money you win for tuition, books, and school fees is safe from the tax man. Money used for tuition, travel, and spending is almost always taxed as ordinary income. The best rule is to speak with a professional accountant or tax lawyer to find out what your financial liability is on any scholarship cash you receive.

Students Often Miss Out on Special Opportunities

Some companies, private foundations, and schools offer cash awards to sophomores, juniors, and seniors based on their majors, graduate school intentions, achievements, etc. Unfortunately, too many first-time applicants assume that scholarships are only given to incoming freshmen. In fact, there are numerous private and school-based programs and financial incentives for pupils majoring in science, literature, pre-medical studies, accounting, and other subjects. 

What's the trick for finding out about these opportunities? Speak with the school's financial director and ask how sophomores, juniors, and seniors can apply for awards based on major fields of study, career paths, future teachers, pre-med aspirants, and others. The general rule for finding money for college is you never know until you ask. That's why it's wise to touch base with someone in the financial aid office and inquire about any new programs or grants as they become available.