Why Private Scholarship Account for Only 5% of What Is Available

A few days ago, the parent of a local high school student asked me at one of my workshops if her student was on the right track applying to scholarships. She explained that her daughter devotes 10 to 15 hours per week identifying the most lucrative scholarships online and applies to the ones she qualifies for. Some of these scholarships require multiple essays, multiple recommendation letters, a resume, official transcripts and a student interview. She said they applied to about seven good scholarships per week.

I first congratulated her on raising and nurturing such a motivated student and told her that I was extremely impressed with the drive, however although they were putting a tremendous effort into applying for scholarships, their efforts are not likely to produce the end result that they are actually looking for.

The truth is that her daughter was not applying to anywhere near the amount of scholarships that she needed to ensure that they were going to have enough money to go to the list of schools her daughter wanted to attend.

Her response was, “How? She has class work and AP exams. She’s the president of two school clubs. She’s on the cross country team. She needs time to improve her SAT scores and fill out the college applications.”

I still remember the frustration. And I’ll admit this student is far above average and extremely motivated. Sadly, students and parents like this will often have all the ambition, work fiercely, but lack basic information they need to accomplish their goals. I completely understand.

Here is my answer this question: first, I do encourage applying to private scholarships, especially from local foundations. A private scholarship is free money awarded to a student by a non-profit organization, business, trust or estate. On the contrary, I do notice that many families get caught into the common pitfall of thinking that a private scholarship is the key to making college affordable for the family and devote far too much time to it. Everyone thinks that because they’re applying to countless scholarships, they’re bound to get enough money for college if they just apply to enough of them.

In my opinion private scholarships are not the best places to start when looking free money for college. If you consider all the sources, you’ll notice most of the money comes from the federal and state government and the colleges. In fact only 5-7% of all free money given out college bound students comes from private scholarships.

The federal government disbursed over 19 billion dollars in grants for higher education last year. The colleges also typically award between 14 and 23 billion dollars each year to students from their own endowment funds , and the State of Califo
ia awards another one billion dollars in Cal Grants each year to students going to schools in Califo
ia.

Fasteweb.com, which is the top source for online scholarships, advertises only 3.3 billion dollars in scholarships on their site. And so many families fight over that 5-7% of the pie, when there are so many places to get the money they need to send their child for college. Furthermore, many of the private scholarships are not four year awards or do not nearly cover the cost of attendance at any college.

If you’re applying to private scholarships because you think the federal government, colleges and the State of Califo
ia categorize you as high income, I still suggest you reassess your situation because this is probably not true. And even if your family is very affluent there are still better ways to use your time to get more money for college.

What is the alte
ative? Instead of budgeting all this time finding and applying to private scholarships online, budget some of that time to finding schools that are generous with financial aid.

To discover the business-side behind the admissions and financial aid process the “stuff-behind-the-stuff” sign up to receive (1) a free chapter of Phillip Lew’s College Planning book, (2) a report on which colleges give grants for high income families and (3) a database on where to find the highest quality private scholarships. To instantly receive these free gifts go too www.totalcollegesolutions.com and watch our 5 minute introductory free video.