With American student debt now over $1 trillion, many families of college-bound students are forced to get creative when it comes to funding their child’s education. One pathway that has become increasingly popular is that of the external, or outside, scholarship.

What Is an External Scholarship?

External scholarships for college differ from those provided by a university in that private donors, foundations, or businesses fund them. The amount of money awarded can range from a few hundred to several thousand dollars per student.

Although the majority of scholarships are available to the general population and are based upon academic performance, engagement in community service, or financial need, there are also a number of scholarships targeted towards students from specific groups. As Conor Brosnan, M.Ed., a guidance counselor at Algonquin Regional High School in Northborough, Massachusetts, notes, “A company may provide a scholarship for the children of employees, or there might be a scholarship for students of Italian heritage."

Some of the most common kinds of scholarships include:

Merit-based scholarships

These scholarships are awarded nationally based on a student’s academic performance. The way that organizations gauge a student’s educational promise depends on the goals of the specific scholarship. For instance, the National Merit Scholarship Corporation offers awards to students based on their PSAT scores, while the Siemens Foundation (whose mission is to support education and workforce preparation in science, technology, engineering, and math) selects its recipients through a rigorous STEM competition, with prizes up to $100,000.

These scholarships are open to students from across the country, so they tend to be particularly competitive.

Heritage-based scholarships

Identity-based organizations that work with communities of a certain nationality or ethnicity sometimes offer scholarships to students of that heritage. For instance, The Agnes Jones Jackson Scholarship offers a scholarship to NAACP members, while the Hispanic Scholarship Fund supports students with a Latino background. In addition to identifying with the group awarding the scholarship, there may be other eligibility requirements for interested students, such as a minimum GPA or community service requirements.

LGBTQ scholarships

Students who identify as lesbian, gay, bisexual, transgender, or queer (LGBTQ) may be eligible for certain scholarships, such as the Point Foundation Scholarship, which is given to students who have notable academic and leadership achievements, or the LEAGUE Foundation Scholarship, awarded to students with a minimum 3.0 GPA and community-service involvement.

Scholarships for women

Under certain circumstances, women entering college are eligible for scholarships that are expressly tied to their gender. For instance, women pursuing particular fields can apply for scholarships like those given out by the Women in Defense organization to female applicants who are interested in studying international relations. Similarly, single mothers entering college are eligible for scholarships such as the Soroptimist Live Your Dream Award, while women who are returning to school at an older age may be eligible for financial awards like the AARP Women’s Scholarship Program.

Scholarships from religious organizations

National and local religious organizations may have funds for students of a specific faith. For instance, the Islamic Society of North America offers scholarships to Muslim students, while the Baptist Life Association offers awards to students affiliated with Baptist churches.

Scholarships from local organizations

A variety of local organizations often have funds that they use to help students from their geographic area pay for college. Students should consider researching scholarships offered by local businesses, civic groups like the Elks organization or the Girl and Boy Scouts, or religious institutions in their community.

Scholarships off the beaten path

There are scholarships out there for nearly everyone, even some offered by less conventional funders. Members of Starfleet, the International Star Trek Fan Association, who are thinking of pursuing the sciences are eligible for a variety of scholarships. Or, if a student happens to be a descendant of Lambert and Annetje Van Valkenburg, who immigrated to the United States in 1643, she may be eligible for the Van Valkenburg Memorial Scholarship.

What Kind of Criteria Should I Expect?

Because external scholarships are provided by a wide range of donors, the criteria can vary greatly. While some organizations may emphasize academic performance, other scholarships are offered based on a student’s commitment to a particular cause or her leadership experience. These measures may be evaluated through a student’s transcript, test scores, or extracurricular involvement. Moreover, some organizations may require students to write an essay or complete a project and will select recipients according to an evaluation of these submissions.

Deadlines and applications for scholarships vary, so be sure to keep track of important dates. It’s a good idea for prospective college students to begin researching organizations that award support no later than the summer prior to their senior year. In fact, since some scholarships are given out to students in earlier grades, it’s advisable that younger high-school students search for these financial opportunities as well.

Where to Find External Scholarships?

Thanks to the Internet and the ever-increasing precision of search engine algorithms, finding an external scholarship is just a Google-inquiry away. Still, the world of external scholarships is vast. To narrow the search, Brosnan suggests the following resources:

• Fastweb
• Scholarships.com
• GuaranteedScholarships.com
• College Board’s Scholarship Search

“Many of the scholarships offered on these sites are national, or even international, which are much more difficult to win when compared to smaller, local scholarships," says Brosnan.

To learn about these less competitive local scholarships, students should inquire with their guidance counselor to see what they may qualify for and what the specific criteria are.

Will My Scholarships Affect My Financial Aid?

Receiving a scholarship is, without question, a reason to celebrate since it’s money that does not need to be repaid. Still, being awarded this type of financial support could have an effect on a student’s overall aid package from the university.

According to the College Board, if all of the aid a student receives surpasses the calculated need by more than $300, “The federal government requires the college to reduce the amount of need-based financial aid it awards a student." In such a case, the college or university will decide which elements of the aid package to cut. While this may sound negative, receiving external scholarships is really a benefit since a college’s overall aid package is likely to contain at least some loans — which, in contrast to scholarships, need to be repaid.

Final Thoughts

Just as with other aspects of financing a college education, applying for scholarships should be done thoughtfully and with purpose. Applicants should keep a log of deadlines, requirements, and which scholarships renew automatically and which they’ll need to reapply for annually. As Brosnan recommends, “Students need to spend some time researching for which scholarships they qualify. The more time students put into their scholarship search and applications, the better chance they have of being awarded a scholarship."