5 Scholarship Benefits That Last Longer Than Cash

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Scholarship benefits might seem self-explanatory. These awards help you shrink your cost of attendance and afford your next semester or school year.

The benefits of scholarships for college span much longer, however — they could last a lifetime.

How scholarships can benefit you over the long haul

These five long-term scholarship benefits could be just as meaningful (or even more) as receiving a check in the mail and a pat on the back.

1. Lessen your student loan debt
2. Get a potential career mentor
3. Build out your professional network
4. Beef up your resume and LinkedIn profile
5. Gain an unforgettable experience

1. Lessen your student loan debt

Every dollar you earn via scholarships is one less dollar you have to put toward college tuition, books and other fees. It’s also one less dollar you’ll have to borrow — and repay with interest — via federal and private student loans.

It might not be possible for you to avoid loans altogether — after all, class of 2019 graduates left school with an average student loan debt of $29,900. Winning scholarships for college is a great way to lessen your debt burden down the road.

Say you borrow $20,000 in loans at 6.00% and repay it over 10 years. You’d have to fork over $6,645 in interest, according to our student loan payment calculator.

Student Loan Payment Calculator

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Not sure what your monthly student loan payment will be? Find out with this easy-to-use student loan calculator.

Just enter the amount of your loan, interest rate and how long you have to pay it back. The Student Loan Hero calculator will reveal your monthly bill, as well as how much interest you'll pay over the life of your loan.

How do I use student loan calculator?

To use this calculator, you'll need a few key pieces of information about your loan:

Student loan balance

When you take out a student loan, your balance is the amount you borrowed. As interest adds up, your loan balance can grow.

You might have several student loan balances, depending on how many loans you took out. Most students start with federal loans, since they're easy to access and have relatively low rates and flexible repayment terms.

However, federal student loans come with borrowing limits, meaning you can only borrow up to a maximum amount each year.

Federal student loan limits

Undergraduate students can borrow the following amounts:

  • Direct subsidized loans: Up to $5,500 each year
  • Direct unsubsidized loans: Up to $12,500 each year

Note that the government covers interest during your grace period or other areas of deferment for subsidized loans, which are only available to students with financial need. By contrast, unsubsidized loans are available to any student, regardless of financial need, but they start accruing interest right away.

Graduate students can borrow the following amounts:

  • Direct unsubsidized loans: Up to $20,500 each year.
  • Direct PLUS loans: Up to your school's cost of attendance, minus any other financial aid you already received

Parents of undergraduate students can borrow the following amount:

  • Parent PLUS loans: Up to the school's reported cost of attendance, minus any other financial aid already received

Private student loan amounts

If you've hit your borrowing limit for federal student loans and need more funding for school, you could take out a private student loan. Unlike federal loans, private lenders have requirements for credit and income.

Most undergraduate students will need to apply with a cosigner (usually a parent) to qualify. Once you qualify, you can typically borrow as much as you need to pay for school.

Like with PLUS loans, private lenders will usually subtract any financial aid you already received before covering your remaining cost of attendance.

Interest rate

When you borrow a student loan, you agree to pay back the amount you borrowed, plus any interest that accrues. With the exception of subsidized loans, interest starts racking up from day one.

Federal loans come with fixed interest rates that are set by Congress each year. Your interest rate will remain the same over the life of your loan.

Private student loans, on the other hand, can come with fixed or variable interest rates. You can usually choose which rate type you prefer. Variable rates often start lower than fixed ones, but they run the risk of increasing over time.

When selecting a private student loan, compare offers from a few different lenders to find the lowest rate for you. By shopping around, you can find the loan that provides you with the lowest long-term costs of borrowing.

Loan term

The final factor that goes into this student loan calculator is your loan term, which is the number of years it will take you to repay your loan.

Federal student loans are automatically placed on a standard 10-year term with fixed monthly payments. If you need to adjust payments, you could do so on a graduated plan, extended plan or income-driven repayment plan. These federal plans come with terms that range from 10 to 25 years.

Private loans are not eligible for federal repayment plans. Most lenders will let you choose a term of five to 20 years when you borrow.

What can a student loan calculator do?

Your loan balance, interest rate and loan term can dramatically impact the overall costs of your loan.

If you opt for a short loan term, you'll be dealing with higher monthly payments, but you'll get out of debt faster and pay less interest. A longer term, on the other hand, can lower your monthly payments. However, it means you'll be in debt longer and pay more interest overall.

Use this student loan calculator to see exactly how much you will spend or save with different loan terms. If you can afford to speed up repayment, you can make extra payments on your student loans at any time without penalty. (Just make sure those extra payments are applied correctly.)

You might also consider refinancing your student loans for new terms and lower rates. Refinancing your debt has the potential to save you money, but be cautious about refinancing federal loans, as it turns them private and makes them ineligible for federal plans and programs.

Where can I find more student loan resources?

The world of student loans can be confusing to navigate. Use these resources to learn more about your options and make informed decisions about paying for school:

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Now say you earn a $10,000 scholarship and have to borrow only $10,000 at 6.00% — in this case, your interest charge would be a more reasonable $3,322.

You’d save more than $3,000 in interest thanks to your scholarship benefits. And with less debt to worry about after graduation, you’ll be able to focus on other financial goals, such as scoring your first job.

2. Get a potential career mentor

A scholarship benefit might last a year, or longer if it’s renewable. But if it’s a scholarship that includes other advantages, such as on-campus support, you could be in a position to find a mentor who will guide you for the next decade.

The UNCF/Koch Scholars Program, for example, awards up to $5,000 a year to African American students interested in entrepreneurship. It also matches these students with a faculty member, community leader or off-campus subject matter expert via its mentorship program.

So if you’re a business major, the right business school scholarship could pair you with a professional who can show you what it takes to make it in commerce.

Other scholarship benefits might feature less formal mentorship programs, but the opportunity exists anytime you win an award from a private foundation. Try to build rapport with the people leading the program so you can make the proper connections.

Like with all relationships, you get what you put in. Just remember that careers are all about connections, and you could make great ones via a scholarship. You never know how that benefactor-turned-mentor could help you down the road.

3. Build out your professional network

While scholarships can help you save money, they also can help you earn money as you begin forging professional relationships. Winning awards now can help you add peers to your professional network.

While hunting for journalism scholarships, for example, you might land awards that include out-of-town trips, off-campus lunches and networking events with fellow winners.

Anytime a scholarship benefits more than one student, you have the opportunity to meet a fellow striver, someone who’s also climbing the ladder in college and beyond. They too could be a long-term connection to commiserate with or even partner with down the road.

To make meaningful connections, apply for scholarship benefits advertised by professional associations. They typically include a conference visit, where you can rub shoulders with your regional or national peers. To get started, become involved with the local or on-campus chapter of an association connected to your field.

4. Beef up your resume and LinkedIn profile

If you’re still in school, writing a resume or filling in your LinkedIn profile could be something of a chore. You might be too young to list part-time jobs, summer internships and full-time work.

Scholarships make for solid stand-ins on your resume, at least until you have more career achievements to highlight.

If you’re asked about these financial aid victories during a job interview, you’ll be able to talk about how you took the initiative to apply for them. This could go a long way with a company that’s seeking an independent, autonomous employee.

5. Gain an unforgettable experience

As much as they can positively affect your future, scholarship benefits also help you make everlasting memories. You could win study abroad scholarships, for example, and discover your passions (or yourself) on another continent.

That’s the true benefit of a scholarship award that spans more than a semester or two — it might grant you an experience that could change your life.

With that in mind, expand your search to include scholarship benefits that include an experience — whether that’s volunteering in your community, taking on a leadership role on campus or traveling the globe. The rewards might not be obvious right away, but give them time to manifest accordingly.

As you start applying for scholarships, make sure you avoid common essay mistakes so you can put your best application forward.

Reap the benefits of scholarships

You might equate applying for scholarships with going to the dentist or doing the dishes, but it could help you afford the school of your dreams.

In fact, students and parents cover about 31% of college costs with scholarships and grants, according to an annual survey by private lender Sallie Mae.

Don’t miss out on scholarship benefits that could limit your student debt, further your career or help with self-discovery. Start by applying for scholarships that cater to your skills or background.

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