List: places where Scholarships count against financial aid

Paying for College
1

<p>I'm interested in finding out places where scholarship awards are taken away from financial aid packages. I'm a college admissions advisor in an inner city high school, and students there usually have financial gaps, which we at the HS work to help them fill with scholarships (almost all families have an EFC of Zero). There have been several institutions where their scholarships were subtracted from their grants, leaving them still with a financial gap that they could not pay. Example: State Flagship costs $18,000, student receives $6,000 loans, $6,000 grants, owes $6,000. Student receives $6,000 in local scholarships (just to make the math easier). State U decreases the grant, or loan, by $6,000, RATHER than letting the student use the scholarships to pay the gap--therefore student still owes $6,000 and cannot go there. I do NOT understand why this is done, but I would like to know, and warn, and avoid, these schools. </p>

<p>First on the list:</p>

<p>Goucher.</p>

<p>Anyone else had this sort of experience? Please add to list.</p>

2

<p>Wow…for that to happen to a student with an EFC 0, that’s odd!</p>

<p>usually that happens to a student with an EFC of something. The student gets aid, then gets a scholarship that the family thinks can help with EFC, but then aid is reduced.</p>

<p>*Example: State Flagship costs $18,000, student receives $6,000 loans, $6,000 grants, owes $6,000. Student receives $6,000 in local scholarships (just to make the math easier). State U decreases the grant, or loan, by $6,000, RATHER than letting the student use the scholarships to pay the gap–therefore student still owes $6,000 and cannot go there. *</p>

<p>This is odd, unless the aid is institutional aid and not some kind of state entitlement based on income.</p>

3

<p>We attended 11 open houses - every one of the schools stated that this is how financial aid works. They expect the parent to pay a portion of the cost - even with an EFC of zero = they want the students and parents to take out loans.</p>

4

<p>^^^</p>

<p>I have not found that to be the case with 0 EFC or if need wasn’t met. </p>

<p>Yes, it does happen if need has been met.</p>

<p>Example A…COA = $20,050k
EFC 0</p>

<p>Pell 5550 (entitlement, can’t be taken away)
Stafford (5500…can be taken as long as there is need
W/S 2500</p>

<h2>Institutional aid…2,000</h2>

<p>aid = 15,550</p>

<p>gap is 5,000</p>

<p>If the student gets 5,000 in outside scholarships, often no aid is removed. </p>

<p>However, if the student received 10,000 in outside scholarships, then some of the aid (like W/S, loans, and institutional aid) would get reduced.</p>

5

<p>* State U decreases the grant, or loan, by $6,000,*</p>

<p>Wait…if the school take away the LOAN, then NO PROBLEM. The student can STILL take out the student loan to cover the gap.</p>

6

<p>Wait…if the school take away the LOAN, then NO PROBLEM. The student can STILL take out the student loan to cover the gap.</p>

<p>Isn’t that what most schools do?
They use outside aid to reduce institutional loans- but you can still take out Stafford loans.</p>

7

<p>I think it is more common to apply outside scholarships to Institutional grants first, then to the student portion, either loans or work study next. There are some schools that let you apply outside scholarships to the student contribution (loan/work study) first but that is usually in the very top schools. The family contribution is always the last to be eliminated. </p>

<p>I don’t know of a list going of the different schools and how they apply outside scholarships but it would be a handy thing to have for reference.</p>

<p>In the mean time, the information on how each school handles this is usually available in the Financial Aid section of their web page under Frequently asked Questions. You can have the students check the information before they apply to the school, or if they are already going to the school, don’t bother applying for the scholarship and leave it for someone who can actually be helped by it.</p>

8

<p>Agree with parentofpeople, each school has their own policy, so applicant must look for it on the school’s website. If it is not stated or isn’t clear, call the financial aid office. </p>

<p>Sometimes the school will reduce the amount of their institutional grant by amount of the outside scholarship or will reduce self-help aid. (Loans & Work Study Job). </p>

<p>If the organization giving the scholarship would specify it was for “Books & Personal Expenses” only then it does not affect the financial aid package. Two of my children have received these types of awards to be used for text books. Their financial aid packages were not revised.</p>

9

<p>D’s outside scholarships reduced gov’t loans first. School based grants and WS were not affected.</p>

10

<p>I’ve noticed that some privates (the ones that seem to have small endowments) have a policy that grants/scholarships can’t exceed X amount…so they will reduce their “free aid” if there are outside scholarships…probably so that they can have enough funds to help all their needy students.</p>

<p>But…I’ve never seen this with state schools… And, as mentioned before, if a Stafford loan is removed and there still is uncovered need or a small EFC, the Stafford can still be gotten to cover that gap or EFC.</p>

11

<p>Thanks for this input. @ Poster #4–in fact, that is exactly what happened with Goucher. Students with unmet need of over $10,000, received almost that amount in local scholarships, and the scholarships were not accepted, or not fully accepted, by Goucher, which chose to decrease its grant to the students, by the amount of their scholarships. The other case I know is a “Directional” State U., which reduces the loans (as I described in my post) by the amount of the scholarships, such that the students still owe the gap (which is almost always too much for zero EFC families to pay).</p>

<p>It seems to me such a disincentive to students–why should they work on applying for other scholarships, if it is not really going to benefit their bottom line?</p>

<p>BTW I have scoured FAid websites of various institutions, and rarely if ever have I found any reference to this. I deal with over 250 institutions for my caseload so maybe I have missed something…</p>

12

<p>@Poster #3–which 11 open houses stated this? Can you list them or add them?</p>

<p>Coming up with $500 or $1,000 is one thing–coming up with the average gap of $8,000 or so, on incomes of $12,000 per year, is another thing entirely. Yes, there is always CC–in our very own city, with its high city crime rate. Students need to get out of Dodge, in this particular situation (and all the others like it!)</p>

13

<p>Every single student I work with, with the exception of 2 recruited athletes, ALSO has loans, the basic $5,500, or more, as well as the average gap of $8,000 mentioned above. This is why we at the HS work hard to find our students scholarships. This is why we would like to steer clear of institutions that take away from their financial aid packages when they receive scholarships.</p>

14

<p>

</p>

<p>You need to check EACH school as policies do vary.</p>

<p>MOST schools will reduce the self help portion of financial aid first (that would be loans first, then work study)…followed by grants. </p>

<p>Some schools allow “stacking” of financial aid from ALL sources up to the cost of attendance. In that case, the student could receive scholarships in addition to the school award UP TO the cost of attending the school.</p>

<p>BUT in the case of a flagship U…remember…these schools DO NOT guarantee to meet the full need of accepted students. They provide a level of financial aid that is within their policies for awarding need based aid. IF a student receives outside scholarships, the school can say that they are reducing THEIR institutional aid by that amount. The DO NOT guarantee to meet full need so there is no expectation that financial aid from them (and with other sources added in) will pay the full cost of attendance.</p>

15

<p>Per Lawrence University web site: First $1,000 of outside scholarship is subtracted from self-help (i.e. student loan and/or work study); then add’l outside scholarship $ is split 50/50 between financial aid and self-help, but nothing is reduced from any institutional merit scholarship. Got that?</p>

<p>Per Lake Forest College web site: Outside scholarships $: “In most cases” 1/2 is used to reduced EFC and the other 1/2 is used to reduce any institutional grant. Unclear what happens if no school grant.</p>

16

<p>*The other case I know is a “Directional” State U., which reduces the loans (as I described in my post) by the amount of the scholarships, such that the students still owe the gap (which is almost always too much for zero EFC families to pay).</p>

<p>*</p>

<p>there seems to be a miscommunication. If the state school reduces the student loan because of the scholarship…but there still is a gap…the student CAN STILL get those student loans back. Anyone with a gap or an EFC that has not borrowed up to their “max” can do so…as long as total doesn’t exceed COA.</p>

<p>frosh 5500
soph 6500
jr 7500
sr 7500</p>

<p>So, if this is the scenario at the state school…</p>

<p>COA = $16k
EFC = 0</p>

<p>Pell grant 5550</p>

<h2>student stafford direct loan 5500</h2>

<p>gap = 4950</p>

<p>**If the student then gets 5,000 in private scholarships **and the school takes away 5,000 in loans…THEN…the student can still demand that loan back because he still has a 5k gap. The student has a right to getting that loan back because he has unmet need and he’s not at his max for student loan.</p>

17

<p>Ah, this is helpful to know. My daughter’s school has nearly met her full need, with the exception of about $2000. So, even though she has as of right now about $10000 in local scholarships which the school will use to offset the $5000 in loans and $1250 in work study, she can still take out the $2000 unmet need in loans, correct? It would seem to me should have her take the loan in place of part of the PLUS loan I need to take to cover a portion of my EFC, since the loan terms are better (subs. and lower rate) than I can get for a Plus loan, and then I will pay it off for her.</p>

<p>On a side note, I really wish some of these local organizations would allow you to “defer” their scholarships to the next year. She has more than enough to cover her loans and work-study, and her college’s policy is to take any excess off their institutional grant. She will be getting at least one more scholarship at graduation due to her class rank, so that in her case, several thousands of scholarship money will in effect be cancelled out. I understand WHY the school does this; I just wish they didn’t. All those hours she spent crafting those scholarship essays…</p>

18

<p>The TOTAL of financial aid cannot exceed the cost of attendance. If your daughter’s outside scholarships added to her college aid add up to more than the cost of attendance, I believe the college WILL reduce her aid someplace so that it does not exceed the cost of attendance.</p>

19

<p>* My daughter’s school has nearly met her full need, with the exception of about $2000. So, even though she has as of right now about $10000 in local scholarships which the school will use to offset the $5000 in loans and $1250 in work study,** she can still take out the $2000 unmet need in loans, correct**?*</p>

<p>Yes…since she has unmet need…and she hasn’t reached the annual max of Stafford student loans for her college year. If she’s a frosh…that amount is** up to **5500.</p>

20

<p>

</p>

<p>Isn’t it obvious? Look at it from the school’s standpoint. The purpose of grants is to meet financial need. An outside scholarship is a resource which can be used to pay for college, reducing the need. If a third party is willing to kick in part of that need, why shouldn’t the school reduce their need-based package?</p>

<p>I understand your desire for a comprehensive list, but the fact that someone hasn’t already done this should tell you that it’s not really practical. As other posters have mentioned, school policies vary and the only real way to tell is to check with the specific school.</p>

<p>One example: My D applied to 5 schools, and even among that tiny sample, we ran into 4 different policies. One school reduces grants first, one reduces work/study first, and two reduce federal loans first. If the scholarship exceeds that “first”, it will then be applied against one of the other elements, and this also will vary by school. Only the fifth school allowed outside scholarships to be applied to EFC, and even then, only up to a certain amount. After that, they would be applied to either grants, loans, or work/study (I can’t remember which).</p>

<p>So you can see that there are so many permutations of this phenomenon that it’s difficult to compile a Yes/No list. But as a general rule, from our experience and from what I’ve read elsewhere, most schools are going to use outside scholarships to reduce some piece of the need-based aid. Not all, but most. </p>

<p>When my D was a senior and I found out about this issue, I told her not to waste her time applying for such scholarships. In addition to the problem you identify, there were plenty of other things not to like. For starters, most of them are in the $500-1000 range, nickel-and-dime stuff compared to the cost of college. And most of them are one-year scholarships only, and available only to freshmen – what about sophomore year and up? I asked her instead to spend that time researching schools which are known for giving good merit money for applicants with her stats. With that strategy, she won a very nice scholarship *from the school <a href=“renewable%20–%20meaning%20that%20she%20doesn’t%20have%20to%20re-apply%20for%20it%20every%20year”>/I</a>. This, on top of a generous need-based grant, made college possible.</p>

<p>Finally, I got some great advice which you might want to pass on to your students: More than 95% of the scholarship dollars are awarded by the schools themselves. Go where the money is. ;)</p>