CF - legality of paying a scholarship award to a student's student loan

EvannaHardin

We have a few funds that award scholarships to the contestants in a pageant or rodeo. These recipients may be older and already have earned degrees or are committing to a one-year reign so are not able to attend college the next school year.

Do you pay scholarship awards directly to a student loan?

As a Community Foundation, what legal things should I be aware of as we consider this option?