What can I use scholarship money for and how do I use it?

Scholarships can go a long way in helping you afford the high cost of college. You can typically use the money towards tuition, room and board, and other education-related expenses. However, some organizations restrict how you can spend the cash. In this article, we've highlighted what you can use scholarship money for, how you can use it, and temptations you'll want to avoid.

What can I use scholarship money for?

Unlike loans, you don't have to pay back scholarship money…in most cases. Some awards come with stipulations or requirements that you need to meet in order to receive the cash. For example, if you have to attend a banquet as a winner, you need to attend. If you skip it, they won't give you the scholarship.

In addition, many organizations dictate how you can spend the money. Some might restrict you to using it just for tuition, while others say you can use it for anything education related. A select few allow you to use the money however you see fit. If you decide not to follow these requirements and you're caught, you might have to pay the money back!

Typically, you can use scholarship money for:

• Tuition: All scholarships can be put towards tuition and related fees, a major part of your cost of attendance during college.
• Education-related expenses: Some scholarships can be used to cover other expenses, such as books and supplies. A few state specific education-related costs.
• Living expenses: You may be able to use awards to pay for living expenses, such as room and board, rent, or dorm supplies.

Other awards might be dedicated to just summer courses or a study abroad semester.

Always read the terms and conditions before you apply to a scholarship – and definitely before you accept it. If the award has stipulations or requirements, you want to be sure you can meet them.

How to use scholarship money in college

Outside scholarship organizations send the money directly to your college or to you.

If the scholarship is sent to your college, your school will use the money towards its intended purpose, such as tuition or room and board. Additionally, if the organization states it can be used for other expenses, the college will send any scholarship money and financial aid left over to you, either directly to your bank account or by check.

If your scholarship money is sent directly to you, by check or direct deposit, the awarding organization should advise you of any next steps. If the cash needs to cover tuition or similar costs, you have to send the money to your college. However, if the scholarship can be used for any purpose or for general education-related expenses, you can keep it in your bank account.

Award organizations might send the money in small increments, in a large lump sum, or yearly if it's a renewable award.

Colleges use any institutional scholarships and grants you received to cover your outstanding bill with them first. Depending on the award and school, they might send you any remaining money after it's paid in full.

What should you not spend the money on?

If your scholarship comes with no restrictions on how you can spend it, you may be tempted to use it for whatever takes your fancy. We recommend sticking to education-related expenses only.

Put it towards your major college costs first, including tuition, fees, room and board, and supplies. If you have any cash left over, save it for next year. After all, college costs typically go up year after year. Using the money appropriately can help you avoid thousands or tens of thousands of dollars in student loan debt.

You should never use your scholarship money for vacations (including spring break), excessive take-out, video games, or unnecessary clothing.

Always read the fine print when it comes to scholarships and grants. Qualifications don't always end after you've won the award. You might even have to meet certain academic requirements to receive the scholarship again next year. Your future self will thank you for spending your scholarship money wisely.

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