How do colleges deal with outside scholarships? I desperately need help!

Paying for College
1

<p>Okay, so I'm still really confused as to how colleges deal with outside scholarships.</p>

<p>Someone told me that colleges will only start using your outside scholarships to deduct your financial aid package when your total financial aid package (loans, work study, grants, efc) PLUS the outside scholarship exceeds your total cost of attendance, and even then, they would first lower my work-study and loans.<br>
Well, today I called the college (UT Austin) and I asked them if this is true. They told me that even if I don't have my total cost of attendance met, they would still use the outside scholarships to lower my overall financial aid package because there's only a certain amount of need based aid that they (the college) can give me.</p>

<p>A make-believe situation:
Total Cost of Attendance: $11,000
Grants: $5,000
EFC: $4000</p>

<p>So my need right now is $2,000, right? So if I have $1,000 in outside scholarships that I report, would the university not change anything in my financial aid package because I still have a $2,000 need or would they still deduct the $1,000 from my grants?</p>

<p>So, what's really right? Or am I in some way misunderstanding what the college is telling me?</p>

<p>Thanks!</p>

<p>Also: If I obtain enough outside scholarships, can my EFC be lowered, or does that number always stay the same?</p>

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<p>You need to ask YOUR school. Policies on how outside scholarships are dealt with vary from place to place. Some schools will allow “stacking” up to the cost of attendance. Some schools will take your outside scholarship and this will reduce your need. In this case, your need based aid will be reduced because your outside scholarship reduced your NEED. Those schools also have varying ways to deal with this. Most of these schools will NOT allow outside scholarships to reduce the family contribution. The outside scholarship usually reduces your loans first, work study second and any free aid (grants) third. BUT again…this varies by school.</p>

<p>It sounds like UT will reduce your overall NEED by $1000 (outside scholarship) and that your aid will be reduced because of this. Were you offered a Stafford loan (if you completed the FAFSA you would have been), and if so, you need to ask them if your loan would first be reduced. You have $2000 that possibly could have been covered by a Stafford loan…maybe they will reduce that first…ask them.</p>