The 22-year-old singer was diagnosed with bipolar disorder in 2011, reported People magazine.
"Mental illness can affect anyone, and although help is available, it often goes untreated. This holiday season, I'm so excited to raise awareness to a cause that is close to my heart by inspiring others to seek the help that they need and encouraging folks to give back to those who can't afford treatment," she said.
In a video posted to her Facebook page, Lovato, 22, tells fans that she decided to start the scholarship organization for her father, Patrick, who died in 2013.