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The Truth About All Those Unclaimed Scholarships?

Photo by 金 运 on Unsplash

Stop me if you have heard this one - “Millions of dollars in scholarships go unclaimed every year.”

I get calls from parents asking me if this is true and if so, how their student can get some of that money? It feels like the truth - this idea that if you just knew where to look that you will be able to make college more affordable.

The reality is that they have been lied to, and in many cases, they have fallen for a marketing tactic that has actually been ruled by a judge to actually be considered fraudulent.

Here’s the truth: Most scholarships have many more applicants than can be awarded and the only kinds of scholarships that do go unawarded fall into two categories:

  1. Federal Pell Grants: during the 2020-21 admissions cycle, nearly 1.7 million college students would have qualified for a Pell Grant had they simply submitted a FAFSA according to a report from the National College Access Network.

  2. Scholarships that feature overly narrow awarding criteria: At many universities and colleges, when a donor gives money for a scholarship they often add awarding conditions that limit who can receive the scholarship they are funding. In some rare cases, those conditions can result in a very small pool of students eligible for the scholarship. So every year, financial aid officers then have to hunt for the needle in a haystack. For example, one of the colleges I worked with last year had a scholarship designated for a student from a specific county, who had to have an A average gpa, and who also had to have worked in a lumber yard during high school. These kinds of scholarships can certainly go unawarded, but I wouldn’t pin your hopes on them for making your tuition bill any lower.

However, as college costs increase and confusion about third party scholarships grows, this myth of “hidden” pot of scholarship money waiting for applicants still circulates in parenting groups and online discussion groups.

When we are working with families, we emphasize the following:

First, maximize earned state benefits. Depending where you live, you will likely have scholarship and grant programs available to you. Make sure you are keeping up with any requirements for these programs, as they are the first building blocks for an affordable college plan. For example, we live in Tennessee and the College Pays site details many opportunities for residents including how to maintain your eligibility.

Second, focus on understanding and maximizing scholarship options at the various colleges your students will be applying because

  • This source will account for a much larger proportion of a financial aid package than any outside or third party scholarship, and

  • Grants from colleges are often renewable, whereas third party scholarships are often only awarded one time.

Third, instead of hunting down scholarships from the internet, simply set your kid up for a JOB scholarship. That’s where you let your student know that they will be on the hook for a certain amount of their own college costs and they must go and earn it by working a job. Think about it, instead of your student spending three hours writing an essay for a given scholarship in which only 5% of applicants receive any money, simply have them go cut five lawns and in the same amount of time they are guaranteed to have the money. Problem solved.

But if you are determined to hunt down these illusive third party scholarships, how would you do it? You would start with your own personal network looking for organizations awarding scholarship dollars: employers, church groups, community groups to which you belong, alumni clubs in your area for the colleges being considered, etc. One of our clients will be starting her freshman year at the University of Kentucky in the fall. In addition to a scholarship through her high school and other merit-based aid, she received a scholarship from the Free Masons. Her grandfather had been actively involved with the local lodge. Opportunities like these which are inside of your sphere of connection are much safer bets than the essay competitions that are so prevalent on the internet. Speaking of which, if you do decide to check out the internet for scholarship opportunities, be on the lookout for scams in which you pay a service to find scholarships for you. NEVER pay for anyone to find scholarships for you. There are simply too many FREE resources available to you.

With a little preparation and the proper mindset, finding extra scholarship money is certainly doable.

Not working with us yet? Feeling stressed by the college search process? Let's chat.

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