The
Dream: Scholarships
The most prized form of financial aid is,
of course, the scholarship. Hundreds of thousands
of scholarships and fellowships are available
every year. Most are reserved for students
with special qualifications, like academic
talent. But awards are also available to students
who are interested in a particular field of
study, to those from underrepresented groups,
or to students who demonstrate financial need.
Scholarships are offered by the schools themselves
and by private organizations or individuals.
The trick, of course, is to find out about
the scholarships that may be available to
you. There are several free scholarship databases
available on line--free is the operative word
here. Don't waste your money on fee-based
scholarship matching services. All the information
that you'll need can be found on the Web and
in various print resources. Log on to as many
scholarship search sites as you want, and
compile information on scholarships that you're
interested in. Then submit away! The good
thing about scholarships is that there's no
limit to how many you can get.
Myths
about Scholarships
There are many widely held myths and misconceptions
about scholarships. Perhaps it's because of
the many different kinds of scholarships available
or the variety of requirements needed to get
them. Maybe it's because the process is time
consuming and sometimes complicated. Whatever
the reason, several scholarships myths are
out there, so we'd like to take this opportunity
to dispel some of them.
Myth
#1: Billions of scholarship dollars go unclaimed.
Most universities will tell you that they
seldom have unawarded scholarships, and, if
they do, it's usually because of timing or
because of the highly restricted nature of
a small number of scholarships. The "billions
of dollars" figure comes from unused
employee tuition benefits, which account for
about 85 percent of unclaimed aid dollars.
The number of unused scholarships is actually
miniscule.
Myth
#2: I can't possibly get a scholarship with
all the competition out there.
Alan Deutschman, author of Winning Money for
College, received a degree from Princeton
University for practically nothing by taking
the initiative to enter scholarship contests
wherever and whenever he could find them.
As Deutschman claims, there are a lot of contests
out there; you just need a little resourcefulness
to seek them out. Not all scholarships are
for A students; some are for those with a
particular interest, those from a particular
ethnic background, those affiliated with professional
and fraternal groups, and so on--the list
is endless. Another tactic is to look locally
for opportunities in churches, civic organizations,
and other groups. You won't believe the number
of opportunities that you'll find if you just
look hard enough.
Myth
#3: Scholarship searches are worth paying
for.
As a prospective student, you have a wealth
of information at your fingertips. For starters,
visit your library, search the Web, and browse
through bookstores--you'll soon find that
you don't need to pay anybody for what you
can do for free.
Myth
#4: I'm a top student, so I don't have to
seek out scholarships. They'll
come to me.
Don't take it for granted that you'll get
a free ride through business school. The odds
are not in your favor. Very few students are
lucky enough to get through college on scholarships
alone--and in graduate school, it's practically
impossible. Therefore, we strongly encourage
you to explore all the options that are available
to you for funding your business degree, including
loans, employer-funded tuition remission,
and work-study.
Beware
of Scholarship Scams
Unfortunately, there are a lot disreputable
people who make a killing by taking advantage
of students searching for aid. The Federal
Trade Commission (FTC) claims that several
unscrupulous companies promise you scholarships,
grants, or fantastic aid packages; many use
high-pressure sales pitches at seminars where
you're asked to pay them immediately or risk
losing out on the "opportunity."
According to the FTC, several legitimate companies
can get you access to lists of scholarships
for a fee or compare your profile with a database
of scholarship opportunities and provide a
list of awards for which you may qualify.
The difference? Legitimate companies never
promise or guarantee scholarships or grants.
The FTC (www.ftc.gov) advises you to keep
your eyes open for these tell-tale claims:
"The
scholarship is guaranteed or your money back."
No one can guarantee that they'll get you
a grant or scholarship. Refund guarantees
often have conditions or strings attached.
Get refund policies in writing--before you
pay.
"You can't get this information anywhere
else." There are many free lists of scholarships.
Check with your school, your employer, or
your library before you pay someone to do
the work for you.
"May I have your credit card or bank
account number to hold this scholarship?"
Don't ever give out your credit card or account
number on the phone without getting information
in writing first. This may be a set-up for
an unauthorized withdrawal.
"We'll do all the work for you."
Don't be fooled. You must apply for scholarships
or grants yourself. There's no way around
it.
"The scholarship will cost some money."
Don't pay anyone who claims to be "holding"
a scholarship or grant for you. Free money
shouldn't cost a thing.
"You've been selected by a `national
foundation' to receive a scholarship,"
or
"You're a finalist" in a contest
that you never entered. Before you send money
to apply for that scholarship, check it out.
Make sure the foundation or program is legitimate.
If
you're approached by someone who you think
is a scam artist, contact the FTC's Consumer
Response Center at 877-FTC-HELP (toll-free).
The
Reality: Loans
We're not trying to discourage you from going
out and seeking a scholarship (or a dozen
scholarships, for that matter), but the reality
is that you'll probably need to take out a
loan to pay for part of your business degree.
There are fewer scholarships and grants at
the graduate level, unfortunately, and competition
for assistantships and internships can be
tough; there simply isn't enough money to
go around for everyone. But never fear--scores
of low-interest loans are available to help
you make ends meet.
Student
Loans from the Federal Government
Federal education loan programs offer lower
interest rates and more flexible repayment
plans than most private loans; they also do
not require credit checks or collateral, as
most private loans do. Federal loans can be
either subsidized, where the government pays
the interest while you're in school, or unsubsidized,
where you pay all the interest (these payments
can be deferred until after you graduate).
To receive a subsidized Stafford Loan, you
must be able to demonstrate financial need.
All students, regardless of need, are eligible
for unsubsidized Stafford Loans. With Stafford
Loans, graduate students can borrow $18,500
per year; of that, $8,500 is subsidized. Many
students combine subsidized loans with unsubsidized
loans to borrow the maximum amount permitted
each year. Perkins Loans are awarded to students
with exceptional financial need. With this
program, the school acts as the lender, using
a limited pool of funds provided by the federal
government. The amount of the Perkins Loan
that you'll receive is determined by the financial
aid office; the limit for graduate students
is $5,000 per year, with a cumulative limit
of $30,000 for undergraduate and graduate
loans combined. (Some institutions participate
in the Expanded Lending Option program, wherein
they can offer higher loan limits for Perkins
Loans.)
Student
Loans from Private Institutions
Many students must turn to private loans after
they have tapped into all other sources of
aid. Fortunately, several low-interest student
loans are available through many lenders.
If you're a wise consumer, you'll shop around
for a loan that will offer you the best interest
rate and terms of repayment. Remember, you
should be certain that you have exhausted
all other options for paying for your education
before you consider a loan. You may not want
to approach your parents for money, but chances
are that their interest rates are more lenient
than any that you'll find at the bank! They
may have even saved some money for you in
the hopes that you'd go back to graduate school
some day. It can't hurt to ask.
This article is an excerpt from "Gameplan
for Getting into Business School" by
Michele F. Kornegay
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