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When clients think about how their child can bridge the gap between the cost of college and the education savings they have set aside, they think of one silver-bullet solution:
Private scholarships.
However, for most American families, the idea that private scholarships will solve all of their college funding woes is just that – an idea. Of course, there are always exceptions to the rule. Sometimes students will qualify for a one-in-a-million scholarship opportunity with a big company, like Coca-Cola. Unfortunately, those scenarios are few and far between.
So, does it make sense for financial planners to help their clients search for private scholarships?
In short, yes. You don’t need to hold their hand through the process, but you can at least get them pointed in the right direction.
The key when looking for and applying to private scholarships is to maintain realistic expectations, and to seek out opportunities that are an ideal fit for your client’s child.
Where Will You Find Private Scholarships?
There are so many different resources available when it comes to looking for private scholarships. In general, it makes the most sense for your clients to start with their child’s high school guidance counselor. If their high school has a specific counselor to assist with college applications and admissions, great!
Help them to contact these resources, as they’ll be able to point you to scholarships at your local universities as well as private scholarships available in your local community. For example, many local organizations and groups will have scholarships available for high school students who plan to attend college in the state, or who do volunteer work for their cause.
Once you’ve reached out to their guidance counselor, help your clients think through what local organizations they’re connected to. For example:
- Some larger organizations offer scholarships for children of their employees
- Churches and religious groups may have scholarships available for graduating seniors
- Clubs and social groups can offer scholarships for members and their children
You can also have your client’s child assist in the search by looking online. Sites like Fastweb.com and collegeboard.org can help them to organize a list of merit and need based private scholarships that they qualify for.
College Aid Pro™ Family Portal and MyCAP both give parents and students the ability to search for scholarships by using the private scholarship search tool. This is a good way that you can help your clients track details of scholarships including deadlines, requirements, and whether or not your client’s child was awarded the scholarship when all is said and done.
Where Else Can You Look For Scholarships?
The truth is that over 80% of scholarships come directly from colleges and universities. If your client’s child has a list of top schools they plan to apply to (or have already applied to), do a bit of digging to see if the colleges offer scholarships to students who meet certain criteria.
Many of these scholarships may have a need-based component, but others may focus on test scores, GPA, or are only offered for a specific field of study. Others still may be available to students who aren’t freshmen, which is something for your clients to keep in mind as their student progresses through their education career.
How Much Funding Should Your Client Expect?
Studies have shown that the average scholarship recipient will only receive about $4,200. This number includes both private scholarships, and awards granted from the colleges themselves. However, many small scholarships are only for $500 (or even less). Many high school seniors and their parents skip over these smaller scholarships because it doesn’t feel like they’re “worth the time.”
The truth is that, when it comes to bridging the gap between what your clients can afford to pay for college and what they’re expected to pay, every dollar counts. Even if their child only spends a few hours applying to each small scholarship, they’re still making several hundred dollars an hour if they win. These scholarships can help to offset the cost of books or room and board, and even knock down the total amount of student loans your client will need to take out.
In short, the likelihood that your client’s child will be awarded a multi-thousand dollar scholarship may be low. However, by applying to 6-10 smaller scholarships that are uniquely tailored to their skillset, they’re more likely to earn funds that will have a positive impact on the total cost of continuing their education.
As an advisor, it’s never fun to tell clients they don’t have reasonable financial expectations. This is especially true when you’re talking to them about their child’s ability to find and earn scholarships. There can be a lot of emotional tension when parents are overselling their child’s merits, or just aren’t aware of how steep the competition for some larger private scholarships might be.
Luckily, if you’re prepared with information on the best ways for them to find private scholarships, and are ready to support them in their search, they can still find success! Help them by:
- Setting clear expectations ahead of time
- Leveraging an organization or technology system to track scholarship opportunities and requirements
- Encouraging them to pursue smaller awards that can make a dent in their total expected family contribution
