Scholarships are academic financial awards, which, like academic grants, do not need to be paid back to the institution or individual awarding the money. The benefits of receiving a scholarship are obvious. Depending on the size of the award, a significant portion of a student's academic costs can be addressed without the stress caused by student loan interest rates and the possibility of default and a ruined credit rating.
A select few scholarships may actually cover all of a student's expenses, though these types of awards are far fewer that the partial scholarships that exist in abundance. Unsurprisingly, the higher the amount awarded by any particular scholarship, the more competition that exists for the scholarship in question. These awards are paid on a one-time basis, though they may be distributed in such a way that the award money is distributed evenly by school year or even on a semester-to-semester basis.
There are numerous types of scholarships and these different types are defined, not only by the sum they offer students, but more so by the basis on which the awards are given. Academic scholarships, awarded on the basis of academic achievement, are quite possibly the most common, or at least the most commonly known. These are considered merit-based scholarships, in that they are awarded less on financial need and more on academic performance.
Another common type of merit-based scholarship in which performance is taken into account is an athletic scholarship, in which a high school student with exceptional athletic skill and ability can receive a partial or full college scholarship. Other types of scholarships include major-specific financial awards based on particular fields of study chosen by the prospective college student, religion of the student (particularly if the student is entering a field of religious study), ethnicity of the student, and outstanding records of community service. Scholarships may also take the form of a fellowship, which is essentially a scholarship awarded to a student pursuing an advanced degree, such as a master's or doctorate.
Before a prospective student can even begin to apply for a scholarship, they have to first engage in a great deal of research to determine which scholarship is most suited to their record of achievement, their chosen course of study, and/or their ethnic background. The prospective student must also factor in the amount of the award given, and determine whether or not this amount will be sufficient to cover costs when combined with assets on hand and financial aid.
It's also very important for students who are researching scholarships to bear in mind that some are as contingent upon performance while in college as they are on performance during high school. This is especially true of scholarships that award large sums of money over the course of a student's collegiate career. For some scholarships, in particular certain state and federal scholarships, you will automatically be considered as a viable candidate simply by filling out your FAFSA student financial aid forms and having them successfully processed.