If you don’t have your head wrapped around the basic terms and facts, figuring out how to pay for college and applying for scholarships can be a little complicated.
OK, a lot complicated.
But don’t worry. We’ve got you covered with this section bursting with all the financial aid info you need!
FINANCIAL WORD GLOSSARY
Money given to students to help pay the costs of education (includes scholarships, student loans, grants and work studies)
Money given to students, sometimes multiple times by semester or year, that does not need to be paid back but may have some restrictions
A student loan is money lent by a bank, college or the government that must be paid back with interest in a timely manner
One-time gift of money to students
Source: Arkansas Department of Higher Education
DIFFERENT TYPES OF SCHOLARSHIPS
Merit scholarships are based on your academic, athletic and involvement excellence. Whether you aced all your classes, repeatedly scored the winning goal or led your club meetings, these scholarships want to reward your hard work.
Need-based scholarships see that you need some help to get through college, and they give you a boost to even the playing field. These scholarships usually require you to fill out the FAFSA.
Some workplaces or organizations like to help their employees’ children take the next step in their future. Also, if a family member was involved in the military or law enforcement, you might find some scholarships for you.
These scholarships want to encourage different ethnicities or genders to join their colleges or career fields, or someone who faced adversity first wants to pave the way for the next generation. They want to help out underrepresented minorities.
You never know what hobby or moment of happenstance will result in a scholarship. Some are contests or randomly drawn, and it never hurts to put your name in for consideration.
What You Can and Can’t Spend Your Money On
If you accept some form of financial aid, you may encounter some rules on how to spend your money. Tuition is a safe bet, and a lot of scholarships go directly to the college for direct costs, but the lines get a little murkier when you’re looking at other expenses.
Suzanne McCray, dean of admissions at the University of Arkansas, says financial aid goes to direct costs first and then indirect costs.
“If a student were investing money, buying a house or a car, then we would let the student know that these were not acceptable expenditures, and the student would likely be responsible for returning the funds,” McCray said. “These kinds of conversations are rare because most students either spend scholarship dollars appropriately or do not have enough aid dollars after paying direct costs to be able to do more than buy the essentials — books, food, supplies, a computer, if that.”
Double-check the parameters surrounding your scholarships, but when in doubt, pay direct costs first.
• Room and board
Beware These Common Scams
If a scholarship seems too good to be true, you might be right. Sadly, you’ll run into a few scams on your search for scholarships, so here are some tips to make sure your money goes to your education and not to a scheme.
- Don’t pay an application fee. Most legitimate scholarships don’t require you to pay money to apply.
- Don’t give your credit card or bank account numbers. Applications ask for a lot of information, but they don’t need your banking information.
- Don’t trust guaranteed scholarship programs. They’ll assure you they can get you a scholarship for a small price, but scholarships don’t work that way.
- Don’t believe you’ve won any scholarship that didn’t require an application. Some will claim you just need to pay a processing fee to receive the scholarship of your dreams, but if you didn’t apply, you didn’t get a scholarship.
Sources: Board of Governors of the Federal Reserve System, FRED; U.S. Department of Education; the Arkansas Student Loan Authority; The Project for Student Debt; BeProBeProud.org; LendingTree and FinAid.org; Forbes.com