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COLLEGE SAVINGS 101

Quirky scholarships just as good as traditional
http://www.savingforcollege.com/articles/20100625-quirky-scholarships-just-as-good-as-traditional

Posted: 2010-06-25 - Michael Estrin is a freelance writer from Los Angeles.

by Michael Estrin

Here's one way to make a dent in your college bill: Shoot a video depicting the destruction of your flashcards. Sound odd? It is. But it's also a $500 scholarship offered by SimpleLeap Software, an Atlanta-based firm specializing in education applications.

Like many college scholarships that aren't based on need or academics, SimpleLeap's scholarship is best described as unusual. And while Kalman Chany, author of "Paying for College Without Going Broke," estimates that such scholarships make up only 2 percent of the total dollars out there, many experts say they are a good way for students to fill in the gaps to cover books, meals and other expenses.

Where to look

If you're looking for unusual college scholarships, the first place to go is online, says Joe Orsolini, president of College Aid Planners in Glen Ellyn, Ill. Fastweb.com boasts 1.3 million traditional as well as unusual scholarships, totaling more than $3 billion per year. Fastweb.com and Scholarships.com are among the best sites to research, according to Orsolini. But many people are using these sites, increasing the competition for scholarships, he cautions.

If you know what you want to study, industry trade associations are good places to look, says Steve Loflin, executive director of The National Society of Collegiate Scholars in Washington, D.C. According to Loflin, many trade groups offer scholarships to students interested in a particular field. For example, Loflin points to the William L. Cullison Scholarship offered by the Norcross, Ga.-based Technical Association of the Pulp and Paper Industry, which awards up to $4,000 to students planning to attend an accredited school to study pulp and paper science.

Even if you aren't sure about your major, trade groups may still reward your passion if you're willing to put in some work. For example, The Englewood, Colo.-based National Beef Ambassador Program, a project sponsored by the cattle industry, offers students $1,000 to become beef ambassadors. The application process includes a presentation on beef and an interview, and winners represent the industry at various events throughout the year.

It's also advisable to check with your school, which may offer scholarships that aren't listed elsewhere.

Improve your search

When you're looking for scholarship money from unlikely sources based on unusual criteria, conducting an effective search can be a real challenge, especially when you're working with a large database of offerings.

One important first step is to do a self-examination.

"Before searching, map out your personal strengths and unique talents," Loflin says. "Many of these unusual scholarships are not related to academics. Do you have an uncommon last name? Are you over 6 feet tall? Do you play the bassoon? Analyze your favorite hobbies and extracurricular activities and seek organizations that promote them."

Loflin suggests it's also a good idea to think about yourself in a demographic or geographic sense because some scholarships may be based on factors like ethnicity, religion or your hometown.

Before you cash the check

When you're trying to pay for college, you might think that any money is good money. But before you cash that scholarship check, you'll want to make sure it won't make a dent in the financial aid you get through your school.

According to Orsolini, offsets vary by school, so it makes sense to check with your college financial aid office. Some schools do a dollar-for-dollar offset, meaning that a $500 outside scholarship will result in a $500 deduction from the financial aid package. Of course, that might still be a good deal if you're reducing your amount of student loans. Other schools deduct a percentage of the money that students receive from outside scholarships. Still, others let you keep the entire amount if it's under a specified threshold.

Taxes

For the most part, grants and scholarships don't trigger a taxable event.

"The general rule of thumb is if you are a degree candidate and the funds go to pay for tuition, books, fees or equipment, the funds are tax-free," says Orsolini.

A tax issue may arise if the terms of the scholarship require that it be used for other purposes such as room and board, or specify that it cannot be used for tuition or course-related expenses. Orsolini says even if the money is subject to taxation, most college students don't earn enough income to reach the threshold to pay taxes anyway.

Avoid scams

While pursuing unusual scholarships can be a good way to find extra cash for college, Peter Ratzan, co-founder of College Planning Specialists of Florida, cautions that students need to search with their guard up.

According to Ratzan, applicants should never pay a fee to compete for a scholarship, nor should they pay a "processing fee" for a scholarship the student has won. Similarly, the Federal Trade Commission warns against applying for scholarships that advertise money-back guarantees or ask for credit card or bank information. The FTC also says to avoid services that claim to offer information you can't get anywhere else and to ignore letters or calls informing you that you've been selected for a scholarship you never sought.

Posted June 25, 2010

Here's one way to make a dent in your college bill: Shoot a video depicting the destruction of your flashcards. Sound odd? It is. But it's also a $500 scholarship offered by SimpleLeap Software, an Atlanta-based firm specializing in education applications.

Like many college scholarships that aren't based on need or academics, SimpleLeap's scholarship is best described as unusual. And while Kalman Chany, author of "Paying for College Without Going Broke," estimates that such scholarships make up only 2 percent of the total dollars out there, many experts say they are a good way for students to fill in the gaps to cover books, meals and other expenses.

Where to look

If you're looking for unusual college scholarships, the first place to go is online, says Joe Orsolini, president of College Aid Planners in Glen Ellyn, Ill. Fastweb.com boasts 1.3 million traditional as well as unusual scholarships, totaling more than $3 billion per year. Fastweb.com and Scholarships.com are among the best sites to research, according to Orsolini. But many people are using these sites, increasing the competition for scholarships, he cautions.

If you know what you want to study, industry trade associations are good places to look, says Steve Loflin, executive director of The National Society of Collegiate Scholars in Washington, D.C. According to Loflin, many trade groups offer scholarships to students interested in a particular field. For example, Loflin points to the William L. Cullison Scholarship offered by the Norcross, Ga.-based Technical Association of the Pulp and Paper Industry, which awards up to $4,000 to students planning to attend an accredited school to study pulp and paper science.

Even if you aren't sure about your major, trade groups may still reward your passion if you're willing to put in some work. For example, The Englewood, Colo.-based National Beef Ambassador Program, a project sponsored by the cattle industry, offers students $1,000 to become beef ambassadors. The application process includes a presentation on beef and an interview, and winners represent the industry at various events throughout the year.

It's also advisable to check with your school, which may offer scholarships that aren't listed elsewhere.

Improve your search

When you're looking for scholarship money from unlikely sources based on unusual criteria, conducting an effective search can be a real challenge, especially when you're working with a large database of offerings.

One important first step is to do a self-examination.

"Before searching, map out your personal strengths and unique talents," Loflin says. "Many of these unusual scholarships are not related to academics. Do you have an uncommon last name? Are you over 6 feet tall? Do you play the bassoon? Analyze your favorite hobbies and extracurricular activities and seek organizations that promote them."

Loflin suggests it's also a good idea to think about yourself in a demographic or geographic sense because some scholarships may be based on factors like ethnicity, religion or your hometown.

Before you cash the check

When you're trying to pay for college, you might think that any money is good money. But before you cash that scholarship check, you'll want to make sure it won't make a dent in the financial aid you get through your school.

According to Orsolini, offsets vary by school, so it makes sense to check with your college financial aid office. Some schools do a dollar-for-dollar offset, meaning that a $500 outside scholarship will result in a $500 deduction from the financial aid package. Of course, that might still be a good deal if you're reducing your amount of student loans. Other schools deduct a percentage of the money that students receive from outside scholarships. Still, others let you keep the entire amount if it's under a specified threshold.

Taxes

For the most part, grants and scholarships don't trigger a taxable event.

"The general rule of thumb is if you are a degree candidate and the funds go to pay for tuition, books, fees or equipment, the funds are tax-free," says Orsolini.

A tax issue may arise if the terms of the scholarship require that it be used for other purposes such as room and board, or specify that it cannot be used for tuition or course-related expenses. Orsolini says even if the money is subject to taxation, most college students don't earn enough income to reach the threshold to pay taxes anyway.

Avoid scams

While pursuing unusual scholarships can be a good way to find extra cash for college, Peter Ratzan, co-founder of College Planning Specialists of Florida, cautions that students need to search with their guard up.

According to Ratzan, applicants should never pay a fee to compete for a scholarship, nor should they pay a "processing fee" for a scholarship the student has won. Similarly, the Federal Trade Commission warns against applying for scholarships that advertise money-back guarantees or ask for credit card or bank information. The FTC also says to avoid services that claim to offer information you can't get anywhere else and to ignore letters or calls informing you that you've been selected for a scholarship you never sought.

Posted June 25, 2010

 

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