Why Taxes are a College Scholarship's Best Friend

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Taxes.

Whoohoo, right?

But they're awesome! Because first, the IRS gives both education tax credits and education tax deductions, both of which can help you fund college (check out this link).

And second, scholarship money that goes directly to fund your tuition, fees, and other required expenses is not taxed! This is very different from your job, where you lose a lot of money to taxes. However, there are limitations on this, so again, go to the IRS for more specifics, starting here).

He wants you. And your money. But thankfully, not as much when you fund college through scholarships!

The important thing is to look through the IRS site if you have any questions -- links like "Scholarship and Fellowship Grants" will be extremely helpful to you. Find a mentor, or even a personal accountant, who can help you through this process. It might be a bit of a headache at first, but it's worth it, because you're funding college through scholarships!

Love Scholarships and You'll Get Scholarships

What are you going to be better at: something you love, or something you hate?

Love scholarships, and you'll get scholarships.

If you go into funding college through scholarships with a lousy attitude about how it’s the most miserable thing you’ve ever done, that’s going to come out in your applications. But really—why do you hate it so much? Take a look at these pictures:

Really, scholarships are not so bad. What $1,000-per-hour job lets you eat this...

...while doing this...

...and drinking this...

...while listening to this? Maybe this whole scholarship job is not so bad after all.

Five Fabulous Things You Can Do With Money Saved by Scholarships

I don’t know how much your dream school costs. Maybe $10,000 per year. Maybe $100,000 per year. Regardless, what could you do with all that money you’re not spending on school because you’re funding college through scholarships?

1.     $20,000 (a $5,000/year school) = 40,000 Krispy Kreme doughnuts (and a stomachache)

2.     $40,000 (a $10,000/year school) = $1,256,376.80 if you invest it at 9% annual compound interest for the next 40 years until you retire (not only did you fund scholarships through college, you became a millionaire because of it!)

3.     $60,000 (a $15,000/year school) = 0.92 nights in the Royal Penthouse Suites in Geneva, Switzerland (What’s 0.92 nights? I don’t know. It’s kind of like having 2.4 kids.)

4.     $120,000 (a $30,000/year school) = a nice little uninhabited island in Fiji (in case you went to college to be a hermit)

5.     $200,000 (a $50,000/year school) = 5 minutes in space aboard Virgin Galactic (do you realize that’s $667 per second?!)

Okay, so even if you don’t do any of those things, you have to admit—it’ll be nice to have the extra cash you’ll get from funding college through scholarships.

Making Deadlines, or, the Sure-Fire Way to Disqualify Your Scholarship Application

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There is one sure-fire way your scholarship will never get chosen. 

Miss the deadline.

There is a caveat, however. You need to know the deadline. “Well, that’s silly,” you cry, “of course I know the deadline?” Fine.

Postmark or arrive-by?

Yeah, I thought so. There is a tremendous difference between the two. Some scholarships have a postmark date, meaning, if it’s to be postmarked June 1, as long as the office slams its little stamp on there on June 1, no matter how many days it takes to actually arrive, your application is safe.

However, some scholarships have an arrive-by deadline, meaning, if it’s June 1, your application has to be in their hands by June 1. This is harder for you to plan for, because what if the post office is slow? What if it gets lost in the mail? What if there is a holiday on the day you were going to send it? What if your car runs out of gas on the way to the mailbox? 

Indiana Jones may have been able to speed across continents in a matter of seconds, but your mailed scholarship application is not nearly so cool. Or fast.

So know the deadline, because you want all your applications accepted if you’re going to fund college through scholarships.

Communication with Scholarship Providers Gives You an Edge

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This is Joe. 

In case you didn't know, you can always tell a school is good by looking at its brochures. If all the students in the pictures are smiling, it's for sure a great place.

Joe is a very nice young man who wrote quite a lovely scholarship essay. He was involved in volunteer work with his school, plays basketball all the time, and likes fluffy little puppies. He is a fabulous candidate for Astronauts Anonymous Scholarship.

This is Sally. 

She's really smiling. She must definitely go to an awesome school.

Sally is a very nice young woman who also wrote a lovely scholarship essay, travels around her state speaking about the dangers of drunk driving, and likes Chipotle and living green. She is also a wonderful candidate for the scholarship.

So who gets it?

Well, what if I told you when Joe sent off his application, he sent Mary an e-mail stating how much he enjoyed writing the essay about anonymous astronauts and how he wished her all the best in choosing a qualified candidate for her scholarship.

Joe will probably get the scholarship, if all else is equal. Not because he’s tremendously better than Sally, but because Mary has to make a decision on who to choose somehow. And why not choose the student who is most motivated, respectful, communicative, and passionate about the scholarship?

The moral of this little story? Don’t be shy, because people who don’t communicate don’t fund college through scholarships.