Funds for higher education can come in the form of scholarships, grants and federal or private loans. You typically cannot cash the funds and use them for another purpose. There are a few situations, however, where you may be able to use funds for housing or other costs associated with education though those situations are typically outlined when you receive the offer of the scholarship. Using scholarship funds for noneducational purposes is rarely, though occasionally permitted.
Scholarships
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A scholarship is a payment of money made for your further education. Some scholarships may have stipulations such as keeping a certain GPA, playing a specific sport or taking a certain course of study. You run the risk of losing the scholarship if you do not adhere to the stipulations set for receiving the funds. Scholarships are funds that you are not required to pay back.
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Receiving Money From Scholarships
Money received from scholarships can arrive in several forms: payment made directly to the school, payment made out to the school on your behalf or payment made out to you. If the money is paid directly to the school, or as a check made out to the school, the funds will be used for any outstanding amount owed for education. If the money is paid to you, the funds are assumed to be used for education expenses as defined in the scholarship award.
Receiving a Refund
Most schools keep your account current for each semester, and any amounts due or over payments are dealt with each semester as they occur. When an account has an overpayment, the most common way to settle the account is to issue a refund to the student for the amount of the over payment. When the amount of the scholarship exceeds the amount due, you will get a refund from the school for the difference.
Cashing in a Scholarship
If a scholarship is paid directly to the school or is a check written to the school, you are not able to cash that check. You can cash checks made out to you only. A bank will not cash a check for you when the check is made out to someone else. You will need to send the money to the school for your education expenses. If your payments are more than your expenses, the school will typically issue you a refund.