<p>I've heard of some colleges reducing a financial aid package by the amount of scholarship $ that's being contributed? Has this been anyone's experience. For middle-class families, it sure makes scholarship applications seem less appealing</p>
<p>This is TRUE and applicable to all colleges, although apparently the formula each college uses is up to each financial aid office. My daughter is a freshman at Wake Forest and applied for 26 outside scholarships. What a shock it was when we learned from the FA director that it is a Federal “thing” to deduct scholarship from financial aid awarded. Disappointing, huh? It seems counterproductive to spend so much time searching and applying for scholarships when merit based money will be taken away from your child based on your need. </p>
<p>Yes, it often does.</p>
<p>If the scholarship comes from the school itself, it often comes from the Admissions Office. When the file is moved to the FIn Aid Dept for the fin aid package to be put together, the scholarship award is listed right there, so FIn Aid will take that figure and subtract it from fin need. What’s left is the new need, and an aid package will be built around that.</p>
<p>If it’s an outside scholarship, how it works depends upon the school. Federal aid, other than Pell, does have to be reduced as the outside scholarship reduces the EFC and the need. But usually, most aid packages are comprised of self help, such as Perkins loans, Stafford Direct Loans, workstudy, and what most college do, is take the aid away from that. No big deal in terms of the Stafford Direct, as the student can still take out one to meet EFC, just losing the interest subsidy on $3500 of it freshman year, and loss of work study means a student can often find an outside job in place of working towards the financial aid award. </p>
<p>Where it hurts is when the awards eat into actual grants. And that can happen if a student should get so much money that it does. In many such cases, it’s not a matter of federal law though the school will say this and it does hold for some cases. Many schools will take away their own grants as well once the self help part is replaced by outside scholarships, even if they don’t have to do so.</p>
<p>Where I find it especially egregious, is when a school that doesn’t meet need, takes the money away still leaving unmet need. I draw the line there in terms of being unfair. </p>
<p>The fact of the matter is that a student gets financial aid because of NEED, not merit. Pure NEED. They just happen to have parents who don’t make as much as another student so they get the money to level the playing field. So, if that student gets anymore money, whether through a parent’s bonus at work the next year or a big investment gain or a scholarship, yes, the NEED is subtracted out, and the student should get less. The need has nothing to do with how great that student is. At some schools, those that meet full need, the last one accepted and barely so, can get just as much as the top student with the same need, and more than the student with no need. It’s just need being addresses, so as the need diminishes, the aid is taken away. </p>
<p>Getting substantial outside scholarship money isn’t easy anyways. My son applied to about 20 scholarships, maybe more and got one. It was a $1K award and he did get more than that because they closed that award that year and just gave him what was left. So, getting a lot of merit is not easy. Congrats to those who can get lots of merit money. Another son got a lot of merit money from admissions of various colleges, but the top amount was $5K off a $50K tab. So it’s not all that easy getting merit, and it’s a tiny number of kids so affected. More kids, far , far more, fall short in getting financial need met. So, I’d rather see the financial aid go further than merit kids get to keep need money after need is reduced.</p>
<p>I say this, even as a fin aid/merit receipient who got to double dip in my day, and make money off of scholarships. </p>
<p>Some schools would allow you to stack aid up to the CoA (sometimes even with a small overhead). If excess, they usually will first reduce the loan component (work study is not actual money).</p>