IF YOU'RE A PARENT with a child approaching or already in college, you are probably in tune with various financial aid and loan options that can supplement your college savings.

But one source of funding that's often overlooked is the thousands of private scholarships offered each year. Hundreds of millions of dollars are available and your child doesn't have to be a star quarterback or straight-A student to qualify. Many parents fail to realize there are scholarships out there for just about everyone from model-airplane enthusiasts to future engineers. With a little bit of determination and a decent application, private scholarships (which excludes money offered by colleges and universities) are relatively easy to win.

In fact, many of the scholarship committees are simply looking for a well-balanced student with interests that go beyond academia. Many seek out students who are giving back to their local community. So if your child isn't already doing so, it may be worthwhile to sign him up for a bit of community service, such as volunteering to organize local Special Olympic events. Not only will this provide fodder for his essay and yes, most of these scholarships do require some type of personal statement but the organization itself may even offer scholarships to those who lend a helping hand. (And, hey, doing good never hurt anybody.)

The caveat here is that most awards are relatively paltry compared with the staggering price of tuition. Rewards typically don t exceed much more than $2,000, according to Scholarship America, a large scholarship organization. When you re talking about free money, ever little bit counts, but at a private university this may do little more than cover the book bill.

Parents should also be aware that winning scholarship money could decrease a child's total financial-aid package. Many schools will decrease your aid dollar for dollar based on any money you're awarded, including grant money. So, ironically, it's the kids who don't need the money who can often benefit the most.

Thanks to pressure from organizations like Scholarship America, some schools are starting to ease up on this practice (officially called "displacement"). In some cases colleges and universities have agreed that certain awards won't affect financial-aid packages. In other cases, schools have agreed to reduce loan amounts rather than grants by the amount of the scholarship.

Searching for Scholarships

A handful of helpful free sites such as College Answer, FastWeb and The College Board provide scholarship databases, making research easy. These databases aren't perfect: When we tested them we inevitably were given information about some scholarships that weren't appropriate based on the data we provided. Nevertheless, these search engines are well worth the effort since they are likely to uncover scholarships that parents never dreamed existed. For example, did you know that the Ayn Rand Institute gives out up to $2,000 for the student who writes the best essay on "The Fountainhead"? High school seniors who submit a math or science project to Intel's "Science Talent Search" can win anywhere from $5,000 up to a whopping $100,000, which is awarded to the grand prize winner.

But parents shouldn't limit themselves just to the scholarships that pop up on a Web search. Your child may have the better chances of winning money from local organizations such as churches, civic groups and small businesses, since fewer students are likely to apply. Also look for local chapters of larger organizations. Click here for a list of Scholarship America s local chapters. Your employer, unions and clubs such as the Elks are also great resources for scholarships.

The Competitive Edge

The deadlines for most scholarships range from November through April of a student's senior year of high school. But even if your child is a bit younger, it's not too early to start thinking about scholarships. A younger student can get a jump on the competition by researching which scholarships he or she may be eligible for a few years down the line. Another little-known secret is that plenty of scholarships are given out to high-school freshmen, sophomores and juniors. The money is simply held in a trust until the student has been accepted to college.

Also, don't limit your child to applying for just one scholarship. At $1,000 a pop, he or she will need to win a few of them to help lessen the tuition burden.

Be Warned

As always, parents need to watch out for scams. There are plenty of companies out there offering to find parents guaranteed scholarship money for the low price of, say, $39.99. What you get in return is a list of scholarships you could have found on your own for free. And with those hefty bills looming on the horizon, we bet you've got better things to do with your money than handing it over for an unnecessary service.