<p>I know this may sound silly, but I really am confused. If a student recvs a scholarship does it come out of the side of the school or the EFC portion that we pay?</p>
<p>it usually will come off of your loans.</p>
<p>Say your costs are $30,000.
EFC is $18,000.
Your package from a 100% need met school ( not many are) would be $12,000. Say $6,000 in grant, $3,000 in subsidized Stafford & $3,000 from Perkins loans.</p>
<p>Win $2,000 in a scholarship, and probably your Perkins loan will be dropped to $1,000.</p>
<p>Either way you win, because that is less money that you owe.</p>
<p>Emeraldk is right. Scholarships will generally reduce your financial aid. But most schools will reduce the self help prtion such as loans first. Usually the only time a scholarship will reduce your EFC is when there is no financial need left.</p>
<p>for instance EFC =18000
COA = 22,000
need = 4000.</p>
<p>But you get a 10,000 merit scholarship so you would only pay coa less scholarship. 22,000-10,000=12,000</p>
<p>Thank you both so much. I really appreciate it. This is my first time going through this crazy road.</p>
<p>I was told by a financial person at an informational meeting at my s high school that colleges like to take scholarship $ from their end first. This didn't make sense to me because what would be my incentive for my s to apply for scholarships? you both cleared it up for me!</p>
<p>The schools do not really have much choice if there are federal financial aid funds involved. The EFC cannot be reduced and EFC + financial aid + scholarships cannot exceed COA</p>
<p>It is a steep learning curve isn't it?</p>
<p>The colleges I talked to had different formulas. We just got an aid package yesterday that specifically said that the first $1,000 in outside scholarships went to the student, and anything above that went 50% to reduce the colleges aid package and 50% to the student. Another aid office I spoke with said about the same, that they'd split the scholarship 50/50, with half going to reduce the students contribution and half going to reduce the colleges contribution.</p>
<p>We found the same as jude. Schools handled it differently - some according to timing of "announcing" the scholarship. If reported early (my son had won the Discover Card Scholarship early on, so we reported it when applying for FA). Many schools subtracted that amount out when determining need. Then they made up the FA pkg (giving him the maximum loan amounts instead of using that scholarship money to replace some of his loans). Since most packages are done by percentages (% grant, % loan) and the need was now lowered by the Discover Card scholarship, the overall grant amount was less than when the schools determined the "need" first, then applied that scholarship directly toward his self-help portion. </p>
<p>He later told the colleges about a bunch of local scholarships that were awarded after the FA pkg was provided. Those local scholarship amounts were applied directly against his self-help portion (his loans) in schools that allowed it. Some schools lowered a portion of his self-help while others lowered the school's grants so the bottom line to us was the same. We found that the higher the college ranking, the better the FA pkg (I know, no new news there). I seem to remember most schools do provide their FA policies, so you can see exactly how they apply scholarship $. I remember Yale was very upfront about it. Like jude, we found some did the 50/50 split. Brown allowed my son to eliminate his loans but not his student contribution (one or the other).</p>
<p>The Ivies used to require self-help made up of student loans as well as student contribution from summer employment and work study. In our experience, they allowed you to replace one of those with outside scholarships but NOT all. I'm not sure how the new FA policies will work for those who qualify (low parent income). I've heard for those whose EFC is low enough, they will have their loans replaced with grants, but I haven't read anything about the rest of student contribution. Schools may still require that portion of self-help. If so, local scholarships COULD be used to replace it IF the schools allow that. </p>
<p>In our experience, they did not allow a student to eliminate completely the self-help portion as they felt students should be financially invested in their education. I would check with the individual schools you've applied to. At Brown, freshman who qualify for FA aid always had the work study replaced by a work-study grant. But I've heard this grant is not going to be given in the future, now that they are eliminating loans for students whose parents earn under $60,000. No mention of student contribution from summer earnings - so I think students will still be required to pay something and/or do work-study. Not sure about other schools.</p>
<p>If your school does not meet 100% of "need" - like the vast majority of schools then scholarhsips will go first toward unmet need.
For instance - the COA is $35000 and your EFC is $10,000. The total FA package is $20,000 then a scholarship can go toward the $5000 of unmet need.</p>
<p>Oh my goodness, I am even more confused now. This is sort of what I got out of the financial aid meeting at my sons high school. It looks like colleges do it all differently. At the meeting they told us NOT to apply for scholarships randomly because they will only help the colleges. In other words, the $ your child earns through scholarships will come out of the colleges end. We'll have to wait to get the packages in to see what each school says</p>
<p>So much good information above. My answer (#3) was based more on FAFSA only schools where financial need is reduced by scholarships. I should have emphasized that it is the FAFSA EFC plus federal aid plus scholarships cannot exceed COA. I should remember that - I have been on CC long enough.</p>
<p>guitars - I would apply for whatever you can. Can't hurt. May help.</p>
<p>
[quote]
At the meeting they told us NOT to apply for scholarships randomly because they will only help the colleges. In other words, the $ your child earns through scholarships will come out of the colleges end.
[/quote]
</p>
<p>this is horrible advice - so many schools do not have the recourses to give students all the FA they need. You should call the school's financial aid office - speak with them. they will give you good advice.</p>
<p>Does anyone know what happens if you apply for a 100% need school and you don't happen to have need? After they applied the scholarships to the student portion, could the rest be used for the parents EFC?
Also, does anyone know what happens in the case of HYP with the new financial aid initiative? Can a family that now has need paying only 18,000 a year, use outside scholarships to cover their 18,000, or would the money go to HYP and would the family still be responsible for the 18,000?</p>
<p>If you're not receiving financial aid of any kind, then the entire amount of outside scholarships you receive should get applied directly against your costs - meaning the scholarships you receive should reduce your COA dollar for dollar that you/your parents have to pay.</p>
<p>Ok... So then if the student is receiving financial aid from HYP up to 180,000 income then the outside scholarships after student help and loans would go to cover the 32,000 worth of aid that they are receiving from HYP?</p>
<p>Are Parents are 100% responsible for EFC and prohibited from using any of the outside scholarship money towards EFC?</p>
<p>The scholarships at least can be used to reduce the loans - </p>
<p>The most important thing to remember is - you can't make money. In other words if the COA is 20,000 and you get $15000 in grant/merit aid and a $7000 scholarship then $2000 if that will go toward your grant/merit and it will be reduced.</p>
<p>For HYP - where they meet 100% of your "need" - I would think that outside scholarships can either reduce loans (if you have them) or your EFC. Again, as long as you aren't "making money".</p>
<p>FinAid offices can also make mistakes- my D received a merit award and it clearly said it would not reduce school grants, but they did, until I asked, then they reduced loans :)</p>
<p>bump singermom1's hyp question.</p>
<p>After asking this question, I decided to go to the websites of HYP (for the umpteenth time) I can't believe I missed it before, but they are very clear on outside scholarships. A student can use them to reduce the self help portion of the package ONLY. That means workstudy and summer earnings. They also allow the purchase of a computer. Then, the rest of the outside scholarships reduce the school grant aid ( including aid to middle and upper middle income families). Parents are 100% responsible for EFC. At schools where you do not have need you can use the outside scholarships to cover EFC. I hope that helps.</p>