Free Money for College

As the biggest high school graduating class ever gets ready to head to college in the midst of an economic slump, the scramble for breaks on tuition -- not to mention room and board, books and airfare to get home -- is on.

Some students will be awarded funds in the form of merit aid from the schools they attend, fat financial-aid packages, or both. Others will industriously scour the planet for scholarship money -- and they'll likely find some.

Private scholarships, the ones you get from outside the school itself, account for 7% of all grants awarded, according to the Institute for Higher Education Policy. Some 7% of undergraduates receive such awards, with an average value of a little less than $2,000.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

Mark Kantrowitz, publisher of the popular Web site FinAid.org and a project director at FastWeb.com, a scholarship-search site, says your chances are better than those statistics suggest: The typical student applies for five to six awards, he says, with the odds of winning at about one in ten.

Those aren't bad odds. And you don't have to be an all-star athlete, a musical prodigy or even an A student to collect, either. Many scholarships are awarded to students based on need, lifestyle or special interests.

For instance, KFC Colonel's Scholars awards up to $20,000 to seniors who will be attending a public school in their state and who have financial need, an entrepreneurial spirit and a minimum grade point average of 2.75. The Vegetarian Resource Group offers two $5,000 scholarships each year to students who promote a vegetarian lifestyle in their schools or communities. Budding free-market capitalists can vie for one of 521 awards from the Ayn Rand Institute, ranging from $30 to $10,000, by writing an essay on one of Rand's novels.

Sometimes winning a college scholarship and a crazy contest come in a single package. Creative couples can make their prom outfits out of Duck Tape-brand duct tape (it comes in various colors) and send a photo to the Henkel Corp. Each member of the winning couple gets a $3,000 scholarship.

Where to look. The best place to start your search is in the high school guidance office. A financial-aid officer at the college you're applying to can help as well. Web sites for exploring scholarships abound. One of the best is FastWeb.com, which lists more than 1.5 million scholarships worth more than $3.4 billion and matches scholarships to your profile. Other free sites worth visiting include FinAid.org, CollegeBoard.com and WiredScholar.com.

Don't forget to contact the academic department of your intended major -- advisers and professors there may be aware of specialized awards, especially for students who are already enrolled, that generalists might not be aware of. For example, Microsoft offers full or partial scholarships to college students enrolled in computer science, computer engineering or related fields. Lucky winners are also considered for a paid summer internship at the software giant's headquarters.

Your best bets. There are plenty of national scholarships with payoffs large and small -- Toyota Community Scholars, Coca-Cola Scholars and Kohl's Kids Who Care, to name a few. But you'll get the most bang for your buck by staying local. You may have to look no further than an employer (student's or parent's) or a community group, club or lodge. "The odds are significantly better in your local area, where you're not competing against a national pool," says Bill McClintick, president of the National Association for College Admission Counseling and a counselor at Mercersburg Academy, in Mercersburg, Pa. He often steers students to a $1,000 scholarship the Waste Management Corp. offers to residents of the small nearby township where the company operates a facility.

The narrower the field, the better. Counselor Lisa Sohmer at the Garden School in Jackson Heights, N.Y., recalls a student of Finnish background who won a scholarship, discovered through FastWeb, for her talent in Finnish folk dance. Philadelphia University offers a knitting scholarship for textile students. Then there's the extreme in niche scholarships: one for Catholics with the last name of Zolp attending Loyola University in Chicago.

How to apply. The effort needed to apply for a scholarship varies as much as the awards themselves. Some require a nomination from a school or other mentor, and many require an essay, which often can be a tweaked version of a college-application essay. Other awards require little more than the asking. American Harlequin Corp., which makes flooring for dance studios, gives $25,000 a year to 20 dance students nominated by their hometown instructor. Recipients, who get anywhere from $500 to $3,000, are drawn at random.

Make sure the money truly is free. Schools will reduce financial-aid awards dollar for dollar if scholarships and aid together put the student over his or her calculated financial need by more than a few hundred dollars. However, most schools will apply at least half of the reduction to student loans, so you'll still come out ahead. And scholarships can help bridge the gap when a school's aid package doesn't meet 100% of a student's need.

It's easy to become immersed in the millions of opportunities out there. Don't lose sight of the fact that scholarship money -- by definition -- is free. Don't pay a nickel for services that will match you up with awards you can find on your own. And never pay an application fee. "It shouldn't cost you a dollar," says counselor Sohmer. "Legitimate scholarships are in the business of giving money to students, not taking it away."