What exactly is a scholarship? A scholarship is considered gift money to assist student in financing their higher education. Scholarship money is typically derived from institutional aid and private financial aid. Institutional aid is defined as assistance where the college or university decides on the recipient and makes the award from funds (other than federal or state funds) under its direct control. Private financial aid refers to awards controlled by a non-collegiate organization, which determines the aid recipient and makes the award from its own resources.

Institutional and private support for students actually predates federal and state aid programs by many years. History records that the first scholarship fund was established in 1643, Lady Anne Mowlson presented Harvard College with an endowment of 100 pounds, the income to be used to help a needy student. In the early years of American higher education, then entirely private, scholarships were used mainly to ensure the access and preparation of students aspiring to careers in education, public service, and religion. Scholarships were also used by the colleges as a means of generating income for their operation. For a fee, a donor could purchase a "perpetual scholarship", which would forever cover the tuition of someone, often a family member.

Prior to the 1950s and burgeoning enrollments in the nation's colleges and universities, scholarships were used mostly to attract students into certain disciplines and were frequently awarded to those with specific qualities, above all academic promise and achievement. For the most part, these awards provided all or a part of the recipient's tuition.

Institutional Awards

Institutional student aid funds, like public resources, may take three basic forms. They may be scholarships or grants, usually referred to as gift aid; student loans, either long term (that is, payable after graduation) or short term (normally payable before the next academic year begins); and student employment, both during the academic year and during vacation periods. The funds themselves may be restricted, that is, limited to expenditure by the college or university for student aid purposes; or they may be unrestricted and consequently usable for any purpose the institution chooses.

Private Awards

The amount available for individual students varies from a one-time payment of one or two hundred dollars to, in some instances, the full educational costs for four years of study. This support in the form of scholarships, grants, or loans may come from national or local foundations, civic or service clubs, churches, or corporations. Sometimes the funds are highly restrictive. For instance, limited to the offspring of an employee of a certain business or to students with a particular religious affiliation, or they require the preparation of a paper or the undertaking of some project that demonstrates the academic interest and potential of the aid candidate.

The U.S.. Department of Education offers major Student Financial Assistance (SFA) programs. You must be eligible to receive these grants, work-study and/or loans. To be eligible to receive aid, a student must meet the following requirements:

• Generally, have financial need.
• Have a high school diploma, a GED, or demonstrate the ability to benefit from the program or training offered.
• Be enrolled as a regular student in an eligible program. A regular student is one who is enrolled in an institution to obtain a degree or certificate. An eligible program is a course of study that leads to a degree or certificate at a school that participated in one or more of the student aid programs.
• Be enrolled at least half-time (except for campus-based programs).
• Be a U.S. citizen or eligible non-citizen.
• Make satisfactory academic progress.
• Sign a statement of education purpose/certification on refunds and default.
• Sign an Anti-Drug Act Certification.
• Sign a statement of updated information.
• Sign a statement of registration status.