College Scholarships and Financial Aid – What is the Difference?

January can be hectic with returning to school, but its also a busy time of year for college scholarships and financial aid.  With so many types of money for college available, it can be a bit difficult to navigate the opportunities and keep track of what you’re eligible and what you’ve applied for.

Sources of college financial aid:

• Federal financial aid – is completely free money for college provided by the federal government.  To apply for federal financial aid, students have to fill out a FAFSA report – there’s no other way to be considered.  Students are selected for funds based on financial need:  the expected cost of college minus how much the student and his/her parents are able to afford based on prior year income and tax reports
• Institutional financial aid – is usually need-based as well, but it is financed through the college or university instead of a government institution.  Filing out a FAFSA will typically not get you considered for institutional financial aid!  Each school will have its own forms and application procedures.
  

Sources of Scholarships:

• Institutional – some scholarships are also provided by the college or university that the student is attending.  Usually, these scholarships are available as part of an enrollment agreement and they are typically awarded to students with exceptional grades.  Some are also available on a per-semester basis.  These one-time awards often honor distinguished alumni or groups active within the campus community.
• Public – some state and local governments offer scholarships, for example, the Florida Bright Futures Scholarship.
• Private – some private corporations offer scholarships, as a method of promotion or even to attract qualified students into studying a major that could lead to a career with the business.

Types of College Scholarships:

• Need-based – These college scholarships are provided to students based on their income and/or their families income.
• Merit-based – These scholarships are based on the academic qualifications of the applicant.  Merit-based programs will usually select the students with the best grades, most extra-curricular activities, and the most awards.
• Contests – Scholarship contests ask applicants to create something:  an essay, an experiment, a video, or a promotional campaign.  While some contests may give partial credit to the financial need and academic strengths of the applicant, they’re usually selecting a winner based on the creative product they submit.
• Sweepstakes – Are general scholarships typically selected by a raffle-like system.  They are generally the easiest to apply to, but they also have lower returns and selection rates since so many people can apply so quickly.

To get the most money for college, you’ll need to take advantage of all the various opportunities.  Don’t assume that the FAFSA alone is going to provide enough money to pay tuition, and don’t assume that the application for one program will get you considered for a second award.  Each source is independent and you’ll need to hunt down dozens of potential sources to get truly free college.