Corporate and Employer Sponsored Scholarships for Employees' Children
By Muntasir Minhaz • Published Aug 04, 2026 • US Financial Aid & Scholarships
Large employers and unions fund scholarships specifically for employees' children, with award amounts and rules set by each company or union. Ask your parent's HR or benefits office directly, since these programs rarely show up in general scholarship searches.
🏢 Scholarship America administers children-of-employee scholarships for nearly 700 companies, over 50,000 awards a year
🎓 National Merit Scholarship Corporation lists about 150 corporate sponsors giving close to $13 million a year, including 660 Special Scholarships set aside for employees' children
💵 Union Plus Scholarships pay $1,000 to $4,000 to union members and their dependent children, 181 awards worth $300,000 in 2026
📩 Programs often run through a third-party administrator, so check the employer's HR portal and the administrator's site by company name
⏱️ Deadlines run separate from FAFSA. Union Plus closes January 31, months before many college decisions
What employer scholarships for children are
Employer sponsored scholarships pay part of college costs for the children of company employees. A parent, grandparent or guardian works for the sponsoring company or belongs to the sponsoring union, and that connection makes the student eligible to apply. The company or its foundation funds the award, but a separate committee picks the winners.
These programs sit outside the FAFSA and outside general scholarship search sites, so students often miss them. The eligibility list lives with the employer or union, not with a college financial aid office, so no one at your school will flag it for you.
IRS rules keep the money tax free
The IRS treats employer scholarship money as a gift to the student, not pay to the parent, only when the program meets strict conditions. According to the IRS guidance on company scholarship programs , an independent committee separate from the employer must select winners, and employment only works as a starting qualifier, never as the deciding factor.
The IRS also applies a percentage test. A program limits scholarships to at most 10 percent of employees who apply, and at most 25 percent of employees' children who apply, or 10 percent of all applicants combined. Programs that miss these caps have an alternate path: a facts and circumstances test that requires an independent selection committee, objective criteria unrelated to the parent's job performance, and no requirement to keep working for the company to keep the award.
If a program fails these tests, the award risks being taxed as wages to the parent instead of counted as tax free educational aid for the student. This is why legitimate employer scholarships route through an outside foundation or administrator instead of a manager picking winners directly.
Where these scholarships show up
Three channels cover most employer-linked scholarships in the US.
Nonprofit-administered company programs. Scholarship America runs children-of-employee scholarship programs for close to 700 companies, handing out more than 50,000 awards a year to children, grandchildren and other dependents of employees. Each company sets its own award amount, GPA rules and application window, and Scholarship America runs the review process on the company's behalf.
National Merit corporate sponsorship. The National Merit Scholarship Corporation lists around 150 corporations, company foundations and businesses that sponsored Merit awards in 2025, committing close to $13 million to about 830 corporate-sponsored Merit Scholarship awards and 660 Special Scholarships reserved for employees' children. To qualify for the Merit-linked awards, the student generally needs to be a National Merit Semifinalist or Finalist with a parent at one of the sponsoring companies.
Union scholarships. Unions run their own dependent scholarship funds. The Union Plus Scholarship gives one-time awards of $1,000 to $4,000 to union members, their spouses and their dependent children. In 2026 the program gave 181 awards totaling $300,000, and it has paid out more than $6.2 million to over 4,400 families since 1991.
| Program type | Who runs it | Where to look |
|---|---|---|
| Nonprofit-administered company program | Scholarship America, on behalf of nearly 700 companies | Company HR or benefits page names the third-party administrator |
| National Merit corporate sponsorship | National Merit Scholarship Corporation | Student must be a Semifinalist or Finalist, then check the sponsor list by employer name |
| Union dependent scholarship | The union itself, such as Union Plus | Union local office or the union's national benefits page |
Most programs define "child" broadly, covering biological, adopted, step and sometimes foster children who count as tax dependents. Age caps and a full-time enrollment requirement at an accredited college, university or vocational school are common across all three channels, so check the fine print before you count on an award.
How to find out if your family qualifies
Start with the parent or guardian who works for the company or belongs to the union.
Ask the HR or benefits office directly for a "dependent scholarship," "family scholarship" or "children of employees" program. Many companies list this under education benefits, next to tuition reimbursement.
Check the employee intranet or benefits portal. Larger employers post scholarship details and deadlines there, sometimes only during open enrollment season.
Ask about minimum tenure. Union Plus requires at least one year of continuous membership by May 31 of the scholarship year, and several employer programs set a similar minimum length of employment.
Check whether a third party runs the program. Scholarship America, National Merit and similar administrators use their own application portals, separate from the employer's website, so search the administrator's site by company name too.
If a parent recently changed jobs or retired, ask whether the former employer's program still covers dependents. Some programs, including Union Plus, extend to retired members.
Applying and staying eligible
Treat the employer's deadline as separate from FAFSA and college deadlines. Union Plus, for example, closes its cycle on January 31 each year, months before many college decision deadlines. Missing an employer or union deadline usually means waiting a full year for the next cycle.
Gather proof of the employment or membership link early: employee ID number, a recent pay stub, or union member number. Applications typically also ask for a transcript, an essay and one or two recommendation letters, similar to other private scholarships.
Many of these awards renew each year if the student keeps a minimum GPA, commonly around 3.0, and stays enrolled full time. Check the renewal rules before you count on the money for multiple years, since some programs require a fresh application every year instead of automatic renewal.
Because employer and union committees select winners independently of federal financial aid formulas, applying for one does not stop you from also applying for merit and need-based scholarships at the same time. Stack an employer award with FAFSA-based aid and outside scholarships to cover more of your total cost.