How does Scholarship really affect financial aid from the school?

So I been planning on applying to scholarship after turning in my application to Colleges, but read that scholarships can affect the aid given? I tried to look it into more but all I got was that total aid must not exceed cost of attendance? So I have an EFC of 0 so I should be ok applying to scholarship without worrying my aid would be cut off? Thank you all for the help! (Hopefully this is the right section can’t really find an exact one to exact!)

A merit scholarship will lower your need, so often it does lower your need based FA.

Ex. - school costs $50k. You need $50k to attend (if your EFC is $0). If you receive $20k in scholarships your need is now $30k, so the school will only give you $30k (and that will include your Pell grant).

Why should you apply for scholarships? Because most schools don’t meet full need. If you get $20k in scholarships, you may only get $20k in FA, but you are only getting that $20k anyway, not $50k.

If you applying to only ‘meets full need’ schools, adding an outside scholarships may not help your out of pocket costs, but often the schools that do meet full financial need let you keep that extra money for travel costs, for a new computer, reduce the loans in your package, reduce your requirement for student contribution.

Getting scholarship money never hurts your bottom line. It may not help, but it doesn’t hurt.

Here is an example of how one college handles scholarships with need based financial aid: https://financialaid.stanford.edu/aid/outside/ . Note that the first $5,000 of outside scholarship replaces expected student work earnings, but additional outside scholarship beyond that does not help (what the college lists as its own “scholarship” is need-based grant).

Other colleges will vary.

Are you an international applicant?

It depends on the college, ow it is handled. Some do as Stanford does but all are different.

It does ultimately depend upon the college and their policies. There are some federal and state rules that may come into play too. Though PELL does not have to be reduced for merit, other federal awards do, (not that there is much left in the grant side) and state programs may have stipulations too.

Most colleges i have known sealing with this will reduce need by the merit awards and then remove the self help component of the package. Most will not have an aid package exceed COA unless it comes down to the government entitlements.

When it comes to in-house merit money, you rarely know how they integrated their financial aid with it as you usually get the whole ball of wax at once.

That makes sense.
I assuming though most colleges aren’t meets full need?
But anyway thank you!

Most schools definitely do not meet need. That is what is nice about the merit scholarships - you know what they are.

We asked at two colleges DS is considering because we know there will be an outside scholarship and his high school warned us. The scholarship is from the high school and they are hoping that kids that can’t benefit decline the award so there’s more for those who can.

Both colleges said if the outside scholarship took you over the COA they start with cutting work study and loans before moving on to institutional grants and scholarships. Even with Stafford and work study we have an amount due that will exceed the aid package so basically it just comes off what we’d have to come up with anyhow.

Cschell2 - an outside scholarship wouldn’t cut into non need-based merit at public schools, right? I can see it cutting in to grants/loans/workstudy, but merit?

@bgbg4us - not sure. They said aid packages with outside scholarships couldn’t exceed the COA, so I would assume if you showed up with a really big outside scholarship it could limit school merit as well.

Some outside scholarships/grants are only for tuition and the school’s merit might be for tuition only too. The order the awards are applied may matter. It mattered to my daughter. She had a couple of awards that could only be used for tuition. Any school awards could only be used for school billed items (including room and board), so that money was applied next. Finally, they applied any amounts that could be refunded to her (loans, Pell). The more outside scholarships she would have received, the more (maybe) money refunded to her. In her last semester, there was some school money that ‘went to waste’ because after applying all outside money required to go to tuition and applying all the school money to billed amounts, there was too much school money that couldn’t be refunded. Oh well.

You still aren’t going to be any worse off. Most schools would rather have the outside scholarship money first and then apply their own awards to your account. In cases like cshell2 where the scholarship award could be awarded to the next kid in line, it might be nice to reject it but the money from the college could be awarded to someone else too. Up to you to decide which group you’d like to benefit.

Based on my experience with my daughter, she received a one time scholarship from the American Red Cross. Once the school received the scholarship money, FA office called me to ask how we want that applied-only for current semester or split it for the two semesters.We opted for the amount to go to only to one semester. The school reduced her FA by the amount of that scholarship received.

Did it reduce FA grants, or did it reduce loans and/or work study?