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Funding Your College Education:Scholarship Information: The Basics

Scholarships

"Scholarships are financial awards given to eligible students with no strings attached. If you win a standard scholarship your interaction with the scholarship provider ends when you get the check, unless the award is renewable. According to the IRS, if you are not in school for a degree, the scholarship is taxable. Scholarships used for tuition, fees, books and supplies are not taxable. Any funds remaining after you’ve paid off your expenses are taxable. There should not be a service requirement or other stipulation attached to a scholarship, but always double check. Some scholarships require community service after receiving the award. Scholarships are offered in varieties such as sweepstakes, essays, or competitions for both traditional and non-traditional students" (Scholarships.com, 2015).

Student Loans

"Student loans qualify as financial assistance. Federal loans have the lowest interest rates. Loans are limited to financial need. Students who do not qualify for the Pell Grant but need financial aid have to take out loans. Interest and payments on certain federal loans does not start until at least 6 months after graduation.

Not all forms of financial aid are “free” money. Check out every option available, from college grants to student loans. Any form of financial aid will help pay for college. Remember, get as much free financial aid as possible before taking out loans" (Scholarships.com, 2015)

SCAM?

10 Scam Warning Signs

  1. Fees: You shouldn't have to pay to search for or apply for scholarships. Check out the free scholarship search at www.fastweb.com.
  2. Credit card or bank account information needed: You should never have to give credit card or bank account information to award providers.
  3. Scholarship guarantee: No one can guarantee that you'll win a scholarship because no one can control scholarship judges' decisions. Also, be wary of "high success rates" - they usually do not refer to actual award winners.
  4. No Work Involved: You can't avoid putting in time to fill out a scholarship application.
  5. No contact information: Legitimate sponsors should provide contact information upon request. If the sponsor does not supply a valid e-mail address, phone number and mailing address (not a PO Box) upon request, that could be a sign of a scam.
  6. Unsolicited scholarships: If you are called to receive an award for which you never applied, be alert - it's most likely a scam.
  7. Pressure tactics: Don't allow yourself to be pressured into applying for a scholarship, especially if the sponsor is asking for money.
  8. Claims of "exclusive" scholarships: Sponsors don't make their scholarship available through only one service.
  9. Sponsor goes out of their way to sound "official": Scammers sometimes use official-sounding words like "national", "education" or "federal" or they display an official-looking seal to fool you into thinking they are legit. Check with your school if you question a scholarship provider's legitimacy.
  10. Your questions aren't answered directly: If you can't get a straight answer from a sponsor regarding their application, what will be done with your information or other questions, proceed with caution.

Grants

"Like scholarships, grants are cash awards that do not need to be repaid. There are federal grants, state grants, and private grants. Grants are often awarded to graduate students for research. The best-known undergraduate student grant is the federal Pell Grant. Grantees decide if the money is used toward tuition, research costs or other expenses" (Scholarships.com, 2015).

Fellowships

"Fellowships are for graduate and professional students. Fellowships require students to perform research as part of the deal. Most fellowship packages include stipends on top of covering tuition. Fellowships are lucrative and competitive. Students with exceptional merit are the top-runners" (Scholarships.com, 2015).