Four Scholarship Search Mistakes You Don't Want to Make

Paying for College
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<p>The main focus at this time of year is usually the college search process and the beginning of crafting applications. Financial aid is usually an afterthought this early in the process. But, it's a big mistake to wait and see if you get a free ride and start scrambling if you don't.</p>

<p>The number one recommendation in this post at USNews is, "Don't start too late."</p>

<p>Check out their recommendations and the other three big errors they caution against.
<a href="http://www.usnews.com/education/blogs/the-scholarship-coach/2014/06/12/avoid-making-these-4-scholarship-search-mistakes"&gt;http://www.usnews.com/education/blogs/the-scholarship-coach/2014/06/12/avoid-making-these-4-scholarship-search-mistakes&lt;/a&gt;&lt;/p>

<p>Feel free to add your own potential pitfall below!</p>

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<p>The problem with some scholarships is that they are given to students with low GPAs and test scores in order to help out the students who don’t get automatic merit scholarships. The problem is that these are kids who usually don’t deserve them and spent high school as there own four-year drug experimentation seminar or they give the scholarship to a kid with a low GPA but at the same time already has a full-ride sports scholarship.</p>

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<p>I will add this gotcha (which long-term CCers know about):</p>

<p>If a school offers need-based scholarships and merit scholarships, they don’t necessarily stack. That is, the merit scholarship usually can’t be used to cover the expected family contribution. Instead, the need-based scholarship will be reduced by the amount of the merit based scholarship. It’s like getting no merit aid at all. Not all schools are like this, but I’d guess it’s more common than not.</p>

<p>Check the school’s policy carefully before assuming it’s a good financial match. If the online information is unclear, send them an email and ask.</p>

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<p>On top of what @WasatchWriter‌ said, some schools also take away need-based aid if you’re getting third-party scholarships. This depends on the school, of course; some just take away loans but never grant aid.</p>

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<p>@dividerofzero‌
If certain schools just take away need-based aid depending on your scholarships, why even apply for scholarships? I mean, it makes the whole process somewhat counter-intuitive. </p>

<p>Or would scholarships somehow exist as an actual guarantee of your aid? ugh</p>

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<p>@15dkcrater19‌ Because most scholarship applications are due before March 27 (Ivy Day + decision day for most private colleges) and you can never be sure of how much need-based aid you’re receiving. It worked out in my favor, though, as I’m only losing loans that I wasn’t going to take anyway.</p>

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<p>Good point about third party scholarships reducing the school’s aid in some cases. But, for most third party scholarships you’ll have to apply well in advance of knowing which schools you’ll get into, how much aid they’ll award, etc. I agree that it seems unfair to reduce the in-house aid if there is an EFC and/or loans, but that’s the policy at some schools.</p>

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<p>Stanford gives a clear example of its policy of reducing expected student work contribution first before reducing its own grants when a student brings in outside scholarships:
<a href=“http://www.stanford.com/dept/finaid/aid/outside/index.html”>http://www.stanford.com/dept/finaid/aid/outside/index.html&lt;/a&gt;&lt;/p&gt;

<p>Berkeley has a similar policy of reducing expected student contribution (student loans and work study) first before reducing grants when a student brings in outside scholarships.
<a href=“http://financialaid.berkeley.edu/outside-scholarships”>http://financialaid.berkeley.edu/outside-scholarships&lt;/a&gt;&lt;/p&gt;

<p>However, other schools may have different policies.</p>

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<p>“If certain schools just take away need-based aid depending on your scholarships, why even apply for scholarships? I mean, it makes the whole process somewhat counter-intuitive.”</p>

<p>Because you really don’t know what scholarships and what need based aid you will be getting until you get the actual packages. Also a lot of schools are sneaky about this and will do the integration in house so that you don’t see the results. You just get the entire package with merit and aid thrown in there and you don’t know how they carved it all up to make up your plate. Also some of these schools have merit within need and need within merit and other such hybrids so that until you have all of your choices on the table, you don’t know what your best bet is. </p>

<p>Even when you have it all laid out, you can lose if you pick the school with the biggest package and then come to find out you get an outside award after the commitments are all made and that school promptly applies against the grant they gave you so you don’t get a dime more when the the #2 contender would have applied it to works study and loans. But at the time you made the decision, you didn’t know if you’d get that extra outside award. </p>

<p>So even if you have all of the policies straight and you know them, you may have to take chance and lose out. </p>

<p>I see this with kids who are applying to need aware schools. Yes, you could get zinged for needing money there and not get accepted because of your need, but some of those schools, if they do accept you, will give you great aid packages. Some schools that do not guarantee to meet full need, may have merit awards and may want to give YOU a great package, whereas that school that guarantees to meet full need for you, might have a stingy definition of need and a stringent offset policy as well as lots of loans and other self help. I’ve seen so many different combos of aid that it makes my head spin.</p>

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<p>Since USNews is so fond of making lists of college attributes, I’d really love it if they made the following two lists:</p>

<ol>
<li><p>The colleges that will reduce student loans and/or student or family EFC with outside third-party scholarships. Then you know if your senior is even applying to schools where these scholarships would potentially help if he/she is lucky enough to win them. </p></li>
<li><p>Third-party scholarships that are astute enough to set the terms that they will not be awarded unless the college apply them to student loans or student/family contributions. I have heard generally that these exist but have yet to find a list of them, even the major ones.</p></li>
</ol>

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<p>I want to add that my kids did not do well with outside scholarship awards. In fact, the didn’t even get minimum wage returns for the time we all put in to get any of the sort. We got ZERO major awards over a number of kids over a number of years, with the max award being less than $3K for one kid and he got it because he was a cancer survivor.</p>

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<p>I would agree. My children’s colleges told us not to bother unless the scholarships were prestigious or very large - because they would reduce the aid given by the school (i.e. not the student or parent contribution). They don’t stack. So the time spent trying to get one is often not warranted.</p>

<p>I do remember my child turning down one college (I’m still miffed at the cavalier attitude) when we called to inquire about the unusually low award. The response of the college was “apply for five scholarships a day and you might get some.” (sic). My daughter’s chosen college was more forthcoming. They said it wasn’t worth the effort expended and the time was better spent enjoying the campus and her work-study job (which she loved and which would go away if the outside scholarships were too large).</p>

<p>So we don’t bother. The middle class is truly stuck in the “middle”.</p>

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<p>My student DID put in the time and "bothered’ to apply to outside scholarships, applying to over 40 outside scholarships. She had great success, earning enough to replace subsidized loans and work/study for all four years. We were very lucky that her school, USC, allowed her to use those scholarship funds for the student self-help portion of her aid package rather than reducing grants.</p>

<p>We are also middle class, but our student did “bother,” and it worked out very well for her.</p>

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<p>Captain, great observations (and I was cross posting with you) on the prior entries. If your child who was a cancer survivor (and presumably went on to do great things) but got less than $3,000, the rest of us are really pretty doomed. In my mind, such a candidate SHOULD be a finalist (if not winner) of a major award. </p>

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<p>I am a little baffled that people are surprised that a lot of schools count the scholarship as an asset and therefore as part of the EFC. If the family had $15,000 available for college (per year) and won a $10,000 scholarship, then of course they now have an EFC of $25,000. It is called need-based aid, after all, and the need is now less. What else would you expect? Now if the school takes that out of the grant portion of their need-based package before reducing the work-study and loans, that is a different issue.</p>

<p>The other reason for a scholarship being preferable to not having one is that in most cases it is guaranteed for 4 years as long as certain GPA requirements are met. This buffers people from changes in their own financial circumstances that might affect the FA package.</p>

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<p>Well, one lucky Eagle Scout per yr wins the NESA STEM $50,000 award or the United Health FOundation $25,000 award. It is definitely worth trying for if you are an Eagle and planning a STEM or health major.
<a href=“http://www.nesa.org/scholarships.html”>http://www.nesa.org/scholarships.html&lt;/a&gt;

</p>

<p>But by far, institutional awards give the biggest payout.</p>

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<p>@fallenchemist‌
People are surprised for several reasons:

  1. Kids can spend significant time on the applications during an already hectic and stressful year of their lives. They fill out forms, request transcripts, ask for yet another LOR, labor over essays, meet deadlines and often interview. Then they wait and sometimes they “win.” Yes they are surprised when they discover that all of the their effort does not decrease their EFC and that they “won” nothing.<br>
  2. Scholarship funds come from donors and fundraisers, with the intent of helping students finance their educations. Specific students are chosen and the funds are intended for them. So again, yes a student is surprised when the money replaces their institutional aid thus helping the college, not them.
  3. Students often make applying for scholarships a “job.” Why? Because their parents can’t or won’t pay the EFC. They think that if they are diligent they will be able to fill the gap. Again, they certainly are surprised when they find out that despite all of their work college remains unaffordable.</p>
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<p>@planner03‌ </p>

<p>1) I understand that the whole application process, especially for those that need FA as well, is a lot of work. All the research to start out, then the forms, the essays, well, everything you said. But, regarding the scholarships and in conjunction with answering to your point #2), it quite often does help them. Now it does depend on the exact numbers involved and the policy of each school, but quite often a scholarship can exceed the difference of the total cost of attendance (TCA) and the EFC, so in fact their actual out of pocket is reduced. Let’s say the TCA is $50,000 and the EFC before the scholarship was $35,000. If the scholarship was for $20,000, then obviously the remaining amount after applying the scholarship is $20,000, leaving only $30,000 to be paid. So not only is the family left with $5,000 more of their savings in the bank at the end of that year, but any loans that might have been part of the FA package for the remaining $15,000 are moot. Even if the family was never going to be able to pay the $35,000 the school had as their EFC, or even the $30,000, it is that much less in loans they will be on the hook for from that side of the equation.</p>

<p>Additionally, as has been mentioned, many schools, now that they have less $$ needed from them to have to bridge the gap between EFC and TOA (assuming there is still a gap), will take that and either reduce the work-study and loan amounts before the grant portion, or split the difference between those and grants in some proportion, often favoring leaving the grant mostly intact. So in fact the money does largely benefit the student. After all, not having to do work-study is presumably in favor of the student. Also for your #2, you are only addressing the case where the funds are from the school, but of course there are outside scholarships as well. Still, my point is the same for either.</p>

<p>For 3), well that of course is hardly the fault of the university when the parent(s) won’t live up to what we now commonly consider their obligation, or the university’s problem to be quite honest. I know in the “old days” it wasn’t so unusual for many parents to consider their financial obligations complete when the kid turned 18, and few would look at them askance. Not so true any longer, but not something that is dead as an issue. But colleges are not responsible for fixing all the issues that come up in society, and especially within families. In cases like that there are steps the student can take to be free of having their parents included in the calculations, but of course it can mean waiting a year or two before starting college, especially if this came as a surprise to them upon starting the college application process. Sadly, I have seen those stories far too many times. It sucks for that student, of course, but if they are determined to attend college then delaying it even 2 years is not the end of the world.</p>

<p>Sorry for the rambling dissertation, but my point is still that it is a pretty simple concept that money is an asset, wherever it came from, and so having won a new asset doesn’t erase what you already had, it adds to it. That’s not to say that I haven’t seen it over and over again that it just doesn’t seem to occur to a lot of people that is the case until it happens. Just like a lot of people are shocked they have to pay taxes when they win a big prize like a car.</p>

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<p>@fallenchemist - in the old days MIT, for example, reduced financial aid one for one (i.e. every dollar in scholarship resulted in a dollar reduction in their grant). That served as a disincentive for students to apply for them. Then the formula changed so that the reduction was more like 50 cents for every dollar. Now the formula has changed again to make tuition free for families whose income is under $75K which is much easier for many families to digest. MIT doesn’t do merit aid only need-based aid so our system is a bit different than my children’s universities.</p>

<p>Still, while it’s not shocking that schools reduce their grants - I just don’t think people who are new to the process expect it. “Get scholarships” has always tended to be interpreted as “in addition to”. </p>

<p>Since our child was attending a rigorous college prep program we asked her to focus on academics rather than another college’s admonition to apply for 5 scholarships a day. Several of her friends who attended a local school were trying to do that and it was a lot of paperwork for not much gain. So when talking to my daughter’s FA department we were told the effort (in our case) wasn’t worth it because it would reduce her grants and work study and not result in a net “win” for her unless the scholarship award was huge or prestigious.</p>

<p>As @Mom2aphysicsgeek suggested though - it IS worth it if the scholarships are sufficiently large. A local student asked me to write her recommendation for a foundation scholarship that had a net award of $30,000 each year and she was that year’s recipient. A huge coup for a hardworking, bright young woman. But even as a recommender, it took a half hour for me to get through all the bells and whistles required to submit my report and fill out their own forms. </p>

<p>For most middle class families who don’t qualify for full aid and can’t write the full check - the competition for limited dollars is fierce and the individual amounts are relatively low enough that a cost/benefit (or time/value) analysis is often warranted. How much time does it take from academics to complete and what’s the net gain? </p>

<p>In the end families are faced with tough choices and if applying for lots of scholarships makes sense - I think they go for it. We’re signed up for Fastweb and certain see enough of them land in our inbox each day. Good luck for those in the running!</p>

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<p>@ArtsandLetters‌ - Everything you said makes sense. If in the end one is talking about a scholarship that is relatively small and takes a lot of time and work, then it probably isn’t worth it. But the other issue, that

yeah, like I mentioned I get that is the case. Maybe people that know need to shout a little louder at the beginning of the cycle that this isn’t usually the case and so set people’s expectations accordingly. I guess I am also a little spoiled because the school I spend the most time with, Tulane, is one of the most generous with pretty large merit scholarships, so the issue comes up a lot less. They also have the no-loan tuition guarantee, coincidentally also for people making less than $75,000. So I can see it coming up for MIT more since it would always be about outside scholarships, and given the nature of the typical MIT student they probably get a lot of outside scholarships. But it does definitely still come up from time to time at Tulane. But unless a school is like Harvard and a few others that essentially guarantee that students won’t have to take loans, this will always be an issue unless and until everyone is told the general way of the world up front.</p>