<p>We have a dilemma. Freshman daughter has received financial aid award that leaves us paying $26,000 a year -- ouch! She has won several smallish outside scholarships that total less than $5,000. This money would really help us, but her school has a policy of reducing its aid award dollar for dollar for outside scholarships. We are struggling with two options: decline all the scholarships even though we really need them or try to get them paid directly to her and not report them to the university. Have any of you been in this situation? What have you done? It doesn't seem fair because the school will allow us to borrow $26,000 a year at 8.5 percent interest -- which we can't afford to pay -- but not to accept these small outside that she has earned with her hard work. Would appreciate your thoughts on this.</p>
<p>so this is a school that she is already attending or will attend?</p>
<p>Im assuming she recently found out about the scholarships but committed to attend before hand?</p>
<p>I guess your only choice would be to decline the scholarships- if as you say the school is reducing grant money.
However, if you can get them to reduce loans instead, you would come out ahead.</p>
<p>Not reporting the external scholarships is not ethical. Most schools will reduce the loan portion of their financial aid package when a student is awarded an outside scholarship.</p>
<p>The outside scholarship will not not reduce your expected contribution. If that is the 26K you mention, then they will still expect you to contribute that (and you would have already agreed to that, by this date, right?)</p>
<p>I do not understand why you would not accept the scholarships.</p>
<p>I have also seen a lot of schools where it is applied to loans first. If you try to hide things you run the risk someone will contact the school and report it anyway, and in this case you could find yourself in some trouble. Not just unethical but potentially a big problem.</p>
<p>Accept scholarships because they add to prestige on the resume, even if it's the same cost to you, dollar-for-dollar. Report it and be honest with your new school. You also don't want to have to instruct your kid to be circumspect around the finaid office or cover up for you. That's not worth $5K or any amount. In the following year, if she doesn't win other scholarships, figure the award amount will bounce back up again. Just make sure they understand these were one-time scholarships, nothing renewable, so you won't expect to be entering them into the hopper in the future on your FAFSA's.</p>
<p>Decline them so that someone else can receive the scholarship money. It looks like it won't impact your bottom line. Don't be greedy.</p>
<p>You make an interesting point, kollegkid! But if she accepts the scholarships so then has to reduce by $5K what her college is giving out to her, wouldn't that free up a new $5k that will benefit other students at her own school? I don't think it's greedy. I think the released $5K will still go to those who need it, but attending her own college community.</p>
<p>A lot of outside scholarships will not write the check directly to the awardee. They have not way to making sure the money will actually go towards college - "gee a big check, let's go to the mall!". </p>
<p>If the scholarship is over $600 and they write the check to your daughter, they will have to report it to the IRS as a 1099 misc. income and she will have to pay taxes on it. They very well could copy the college financial aid office on the award letter as well.</p>
<p>My two cents, your daughter earned those scholarships with her grades or good deeds. She probably spent time filing out applications or compiling a scholarhsip folder. Let her keep them.</p>
<p>Accept the scholarships. Most probably they will be beneficial to you in some way.
Also, at some schools FA award is reduced only if the outside scholarships are need-based, but not if they are merit-based. Sometimes it also matters whether or not the outside scholarships are tuition-restricted.</p>
<p>Usually they reduce student's share and loans first, so that should help. Nor reporting could jeopardize everything, especially if the scholarships require transcripts, etc., later on, such as D's do (renewable each year).</p>
<p>I would report them. Teaching your daughter that you are a honest person and how to be one herself: priceless!</p>
<p>Fiskelove, while your daughter has the right of refusing the outside scholarship, it is virually impossible to "hide" the outside funding from the university, and impossible to do so legally. She will have to file a form that precisely inquires about outside funding, and the required tax returns in future years will unveil this source of income. </p>
<p>However, I'd encourage to verify the exact language used by your daughter's school. For other references on CC, it appears you daughter will be attending Duke. Here's the reference to outside scholarships:
[quote]
Source <a href="http://dukefinancialaid.duke.edu/faq_general.html%5B/url%5D">http://dukefinancialaid.duke.edu/faq_general.html</a>
*I'm expecting to receive outside scholarships from my high school or other sources outside of Duke. How will these affect my financial aid award from Duke? *
Because Duke University meets 100% of your demonstrated need, the federal "over award" requirement requires we make a dollar-for-dollar adjustment when students receive outside scholarship funds. In order that these awards can help a student as much as possible, it is our policy to replace a student's self-help first (loan and work-study awards) with any earned outside scholarship funds they receive. If the amount of outside aid received exceeds the amount of loan and work in your package, Duke grant funds are then reduced. Entering first year students are sent an Outside Scholarship Form to complete early in the summer.
[/quote]
</p>
<p>Since almost all students are expected to contribute via self-help, I believe that the outside scholarships will reduce such amounts to her benefit. On the other hand, if the entire $26,000 corresponds to your Federal EFC, this might not be possible without a change in the COA. Students in such situations have reported some success in adding a computer to the COA and use the scholarship money for the purchase. A last option is asking the outside organizations for deferrals to later years when your EFC and financial aid package might be different. </p>
<p>Best of luck!</p>
<p>Thanks, Xiggi. By the way, what's COA?</p>
<p>Cost of Attendance. You can ask Duke if they will let you use some of the scholarship money to purchase a computer; ask them to increase your cost of attendance for the first year by that amount instead of decreasing your needbased grant. :)</p>
<p>Thanks, anxiousmom, good idea!</p>