How Do Scholarships Work?

Scholarships are free money for post-secondary education that you never have to pay back. They work like this: an organization sets eligibility criteria, you submit an application, and if selected, the award is applied to your tuition or paid out to you directly. This guide covers the types of scholarships available, how much you can realistically get, how to apply step by step, where to search in Canada, and whether the money is taxable.

Key Insights

• Scholarships are free money for education that you never have to repay. They are awarded based on academics, skills, community involvement, financial need, or identity, depending on the program.
• Canada has thousands of scholarships available to teens and students, including many that receive very few applications, which means your odds of winning are often higher than you expect.
• Students who apply consistently to multiple scholarships each year can fund a significant portion of their post-secondary costs without taking on debt.

What Is a Scholarship?

A scholarship is a financial award that helps pay for post-secondary education and does not need to be repaid. It is one of the best forms of financial aid available because it reduces what you owe without creating debt.

Scholarships are offered by universities, colleges, private companies, non-profit organizations, community groups, religious institutions, government bodies, and individuals. Each sponsor sets its own rules about who qualifies, how much is awarded, and how the money can be used.

Unlike a student loan, you keep scholarship money even after you graduate. The only way you might have to return it is if you do not meet the ongoing conditions attached to the award, such as maintaining a minimum GPA or staying enrolled full-time.

What Are the Different Types of Scholarships?

The main types of scholarships are merit-based, need-based, entrance, athletic, identity-based, and community scholarships. Knowing which types you qualify for helps you focus your search.

Merit-based scholarships reward academic achievement, leadership, artistic talent, or community involvement. Most require at least a 75 to 80 percent average, though the most competitive awards expect 90 percent or higher.

Need-based scholarships are for students whose families face financial hardship. You will typically need to submit proof of family income. These awards prioritize access to education for students who might otherwise have to skip post-secondary entirely.

Entrance scholarships are automatically awarded by universities when you are admitted, based on your high school grades. At most Canadian universities, students with averages above 80 percent qualify for automatic entrance awards ranging from $1,000 to $5,000 per year. You do not need to apply separately for these.

Athletic scholarships are common in the United States and exist in Canada as well, though they are less common and typically smaller in value. If you compete at a high level, check with individual schools about varsity athlete awards.

Identity-based scholarships are open to students from specific backgrounds, including Indigenous students, women in STEM, first-generation post-secondary students, LGBTQ+ students, and students with disabilities. These are some of the most overlooked opportunities because many students assume they do not qualify.

Unusual scholarships are offered by niche organizations for very specific criteria, like being over six feet tall, being left-handed, or having a passion for a particular cause. These awards tend to have fewer applicants, which makes them easier to win even though the amounts are smaller.

What Is the Difference Between a Scholarship, a Bursary, and a Grant?

A scholarship is primarily awarded on merit, a bursary is awarded primarily on financial need, and a grant is typically tied to a specific purpose such as research or disability support. None of these need to be repaid as long as you meet the conditions.

In practice, many awards blend criteria. A bursary might require a minimum GPA on top of demonstrated financial need. A scholarship might factor in both your grades and your family’s income. Read the eligibility requirements carefully rather than assuming the label tells you everything.

If you want a stronger foundation for understanding all of your funding options, the article on financial literacy for teens covers grants, scholarships, loans, and how to think about paying for education as part of a bigger financial plan.

How Do You Apply for a Scholarship?

Most scholarships require you to submit an application with academic transcripts, a personal essay, two or three reference letters, and sometimes proof of financial need or a portfolio of work. The process takes time, so starting in Grade 11 gives you a real advantage.

Start by searching for scholarships you qualify for and building a tracking spreadsheet. Record the name, amount, deadline, required documents, and whether you have already applied. Many Grade 12 scholarship deadlines fall between January and March, so you need this organized well before then.

Gather your documents early. You will need official transcripts, a list of extracurriculars, volunteer hours, and any awards you have received. Some scholarships also ask for a resume.

Choose your references carefully. Teachers, coaches, employers, and community leaders are all strong choices. Give them at least three to four weeks notice and provide them with notes about the scholarship criteria so they can tailor their letters. A rushed reference letter rarely helps your application.

Customize your essay for each application. Do not submit the same essay to every scholarship. Read the prompt carefully and speak directly to what that organization values. A personal story that connects your experience to the sponsor’s mission is far more effective than a generic list of achievements.

Submit a few days early whenever possible. Last-minute technical issues or missing documents are common reasons otherwise strong applications get disqualified.

How Much Money Can You Get from a Scholarship?

Scholarship amounts range from a few hundred dollars to full tuition coverage. Most students who actively apply receive between $1,000 and $10,000 per year in combined awards, though the largest scholarships in Canada are worth $100,000 over four years.

University entrance scholarships are the most accessible starting point. At the University of Alberta, students with an 80 to 84.9 percent average receive $2,500 automatically. Students with a 95 percent or higher average can receive up to $9,000 per year. Most major Canadian universities offer similar automatic award tiers based on your admission average.

Prestigious national scholarships are much larger. The Schulich Leader Scholarship is worth $100,000 over four years for STEM students. The Loran Scholars Foundation provides $100,000 over four years through a combination of tuition coverage and a $5,000 annual living stipend. These are extremely competitive and require exceptional leadership alongside strong academics.

You can receive more than one scholarship at a time. Many students stack smaller community awards with entrance scholarships to cover a significant portion of their costs. Applying to ten $1,000 scholarships gives you far better odds than applying to one $10,000 scholarship.

Are Scholarships Taxable in Canada?

For full-time students in Canada, scholarships and bursaries are not taxable. The Canada Revenue Agency (CRA) exempts scholarship income for students enrolled full-time in a qualifying post-secondary program, which means most university and college students owe no tax on the money they receive.

If you are a part-time student, the exemption is more limited. You can deduct tuition and program-related costs, but any scholarship money above that amount is considered taxable income and must be reported on your tax return.

Your scholarship will typically be reported in box 105 of your T4A slip. Keep that slip when you file your taxes each year. If you are unsure about your situation, CRA’s P105 guide for students explains exactly how to handle scholarships, bursaries, and fellowships on your return.

Where Can You Find Scholarships in Canada?

The best places to search for scholarships in Canada are your school’s guidance office, the university or college you are applying to, and three major online databases: ScholarshipsCanada.com, Yconic, and StudentAwards.com.

ScholarshipsCanada.com is one of the largest Canadian scholarship databases. You create a free profile and it matches you with awards based on your background, province, field of study, and grades. It has been running since 1997 and lists thousands of awards.

Yconic connects students with scholarships from post-secondary institutions and corporate sponsors. It also offers budgeting tools and student life resources alongside the scholarship database.

StudentAwards.com lets you filter scholarships by province, school, award value, and level of study. It also offers email alerts when new awards matching your profile are added.

Beyond the databases, do not overlook your own community. Local service clubs like Rotary, Lions, and Kiwanis award scholarships every year to students in their area. Your parents’ employers may also offer awards to employees’ children. These local scholarships often have far fewer applicants than national ones, which gives you a much better chance of winning.

What Happens After You Win a Scholarship?

After winning a scholarship, you receive an award letter confirming the amount, the payment schedule, and any conditions you must meet to keep it. Most awards are sent directly to your school and applied to your tuition balance, though some sponsors issue payments directly to you.

Read the renewal conditions carefully. Renewable scholarships require you to maintain a minimum GPA each year, usually between 70 and 80 percent, and stay enrolled in your program. If your grades drop below the threshold, the scholarship may be reduced or cancelled.

Some scholarships come with additional obligations, such as writing a thank-you letter to the donor, submitting a progress report at the end of each year, or attending a recognition event. Treat these as part of the award rather than optional extras. Failing to meet them can cost you the scholarship in future years.

If your scholarship covers more than your tuition, the remaining balance is usually refunded to you and can be used for books, housing, and living expenses. This is one of the reasons understanding your total education costs matters early. The guide to how much teenagers should save can help you think through how scholarships fit into your overall plan.

8 Tips for a Winning Scholarship Application

Start in Grade 11. Many students wait until Grade 12 and miss early deadlines or submit rushed applications. Starting a year early gives you time to ask better references, write better essays, and apply to more awards.

Apply to as many as you qualify for. Volume matters more than most students realize. Applying to twenty smaller scholarships gives you far better expected returns than focusing on one large award.

Research the organization before you write your essay. Scholarships are awarded by people who care about a specific cause or community. Showing that you understand what the organization values makes your application stand out immediately.

Be specific in your personal essay. “I volunteered at a food bank” is weak. “I organized a monthly food drive that collected over 400 items each run and trained six new volunteers” is specific and memorable. Concrete details carry more weight than vague statements.

Give your references at least four weeks. If you ask too close to a deadline, you put them in a difficult position and the quality of the letter suffers. Include the scholarship criteria when you ask so they can speak directly to what the selection committee is looking for.

Proofread everything twice. Spelling errors and unclear writing signal that you did not take the application seriously. Use a grammar checker like Grammarly and ask a teacher or parent to read your essay before you submit.

Check your email regularly after applying. Some scholarships notify applicants within weeks. Others take months. If the notification deadline passes, it is appropriate to send a polite follow-up email to confirm your application was received.

Do not ignore rejections. Most scholarship winners apply many times before they win. If you receive feedback, use it to improve your next application. If you do not receive feedback, review your essay honestly and look for ways to make it more specific and compelling.

Scholarships Are Worth the Work

Scholarships are one of the most rewarding things you can invest time in during high school. Even a few hundred dollars per year adds up quickly over a four-year degree, and larger awards can eliminate debt entirely. The students who win are not always the ones with the best grades. They are the ones who applied consistently, wrote honest and specific essays, and treated the process seriously. Start early, stay organized, and apply widely. You have a better shot than you probably think.

If you end up needing to borrow on top of your scholarships, read up on how student loans work in Canada and the best ways to pay them off so you go in with your eyes open.

Frequently Asked Questions

Do you have to pay back a scholarship?

No, you do not have to pay back a scholarship as long as you meet the conditions attached to it. If you withdraw from school, drop below the required GPA, or fail to meet the sponsor’s ongoing requirements, you may have to return part of the award. Always read the terms before accepting.

How early should you start applying for scholarships?

Start researching in Grade 11 and begin submitting applications in the fall of Grade 12. Most major Canadian scholarship deadlines fall between October and March of your final year of high school. Starting early gives you time to write strong essays and request references without rushing.

Can you get a scholarship with average grades?

Yes. Many scholarships are not based on grades at all. Need-based awards, identity-based scholarships, community awards, and unusual scholarships often have no GPA requirement. Even among merit scholarships, some accept averages as low as 70 percent. Search broadly and do not self-disqualify before reading the actual criteria.

How is a scholarship different from a bursary?

A scholarship is primarily awarded based on academic achievement, talent, or leadership, while a bursary is awarded primarily based on demonstrated financial need. Both are free money that does not need to be repaid. In Canada, both are tax-free for full-time post-secondary students.

Last updated: May 2026

Robert Puharich is the founder of TeenLearner, where he helps teens build real-world skills in money, AI, and life. With over 20 years in education and a Master of Education (M.Ed.) from UBC, he created TeenLearner to teach practical skills such as budgeting, career readiness, decision-making, and the wise use of technology. Robert is also a published author and business founder.