I am confused on how this method can help the student to ease their school financial expenditures..
If I understands it well then I think the whole idea behind it is to persuade and lure an interest in the students to add more time and seriousness into their study. The money mustn't be all enough but to whoever it gets to it is something. And some students may wanna give it a trial to by putting more interest in their study even while they do their paid jobs still but on the account they didn't win yet they got another benefit of learning something new for knowledge sake.
Among these thousands of participants in that contest, only one will win, and therefore, only one among these students will be given reward and got the possible help needed assuming the amount of prize is huge enough to even accommodate a semestral fee.
Its not a thousands students, it's only for a class and a class doesn't exceeds 50 student in a modern setting of learning.
Could be a group thing, any group that won the prize will have to share some how. Its a motivational prize and not a full scholarship don't forget that.