We’re all familiar with college scholarships, but have you ever given any thought to why they exist? There actually are varying reasons for their existence, depending upon who’s offering them, and to whom. Let’s take a look at some of the reasons that college scholarships are offered.

First, the school itself wants to attract talented students to enhance the reputation and prestige of the university. The three main areas in which a school wants top talent are academics, sports, and arts. The college scholarships that are offered usually depend upon what a school is known for, and what its top draw is for attracting donor funding. A school will receive a lot of positive publicity for one or more outstandingly talented students who draw national and international acclaim.

College scholarships may also be offered in a person’s name. This can either be if an individual endowed a scholarship, or if one is set up to honor or memorialize someone. In each of these cases, the named scholarship will usually be targeted to recipients who have something in common with the scholarship’s namesake, such as study in a particular field, a demographic commonality, or some life circumstance. For instance, someone with a hearing loss who studied law may, after achieving success, decide to set up a scholarship open only to deaf law students.

When an individual or foundation is using their own funding for a college scholarship, they have some latitude for determining rules and restrictions on who may qualify. Government and school-based college scholarships are subject to applicable laws that prohibit discrimination.

Scholarships can also be used as a means to promote a desired outcome. This may be to increase enrollment numbers in a subject area (such as nursing), to increase the number of women in a male-dominated field (such as engineering), or to increase the number of minority students in areas of under-representation (such as medicine).

College scholarships also help lower-income students pursue higher education. Rising tuition costs mean that it is difficult to pay out of pocket for a college degree, so more and more people are reliant upon educational grants, college scholarships, and loans for post-secondary education. Some scholarships combine a financial need requirement with other qualifications to help ensure that deserving scholars, athletes, and artists can attend college.

Some college scholarships are targeted to a specific geographic region. They may be funded by the local government, by a club or organization, by a company, or by an individual. The reasons for this are civic pride in helping local students and a desire to see the results of an education benefit the community.

Companies may offer college scholarships to their employees, their employees’ children, or to students who are studying in a relevant subject area. Their reasons are to increase the skill level of employees, retain good workers and increase loyalty. In the case of funding the studies of someone in a relevant area of study, the hope is that the student will come to work for the company after graduation. The company can attract top talent and have a mix of experienced workers and those with up-to-date education.

Whatever the reasons are for offering college scholarships, they usually are a win-win proposition where both the funder and the recipient benefit.