<p>Hello.</p>
<p>Today I learned a not-so-fun fact...that outside scholarships cannot reduce the Parent Contribution for tuition. What happens if the amount available from these outside sources exceeds all the other types of contributions (work-study, loans, grants, student summer earnings)? I can't imagine that the scholarship money just goes to waste...but I don't know for sure.</p>
<p>Thanks for the help. Has anyone else/anyone's children been in a position like this?</p>
<p>Yes I am in this position… especially at top universities that provide 100% of need, this can be frustrating - I contacted my aid office and was able to use my extra funds for a laptop, but I am not sure of all policies. Fortunately, you are in an unfortunate situation. Congrats on the many or one large scholarship! </p>
<p>Basically, colleges will argue if you don’t have a need anymore (based on their idea of need - if you have scholarships, you no longer “need” as much money) they should reduce your aid to help other students. In a way it makes sense - especially for colleges that meet 100% of need. Again, not many people are fortunate enough to be in this position!</p>
<p>Do I understand this correctly. If a student has a COA of 10k, and A EFC of 5k. The student then wins 10k in outside scholarship, the school tell the child they can only apply 5 K toward tuition, the parents must pay the other 5k no matter what? I understand if the students wins 11k, that they can only use 10k, but the parent has to pay even if outside money is available?</p>
<p>most schools will allow you to offset work study, summer earnings, and loans before affecting grants. That has a positive benefit. You can then use your earnings to help out the parental contribution, and reduce the amount of loans you graduate with.</p>
<p>Do I understand this correctly. If a student has a COA of 10k, and A EFC of 5k. The student then wins 10k in outside scholarship, the school tell the child they can only apply 5 K toward tuition, the parents must pay the other 5k no matter what? I understand if the students wins 11k, that they can only use 10k, but the parent has to pay even if outside money is available?>></p>
<p>No. It all depends on if financial aid is involved and what type. </p>
<p>DD won outside scholarships that fully covered her first 1 1/2 years. We paid nothing until the 4th semester. But we also qualified for no financial aids (grants, subsidized loans) and she did not accept Stafford loans. The “extra” money after the first year was applied to her bill the second year.</p>
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<p>Close. The 10k that your student receives will replace the 5 k the school would have otherwise given you.</p>
<p>This is the dirty little secret of scholarships that no one talks about. These scholarships are set up by well meaning people intent on helping students… quite often needy students with low EFC’s. The impact of the scholarships is often to take money from the students that they would have received otherwise.</p>
<p>This policy started with the feds. If a student gets outside (external scholarships) help, then the feds want the loans, work-study, and fed grant money back immediately. The colleges have piggy backed on top of this for much of their funds once the fed money is gone.</p>
<p>Scholarship funds would be well advised to restructure to a forgivable loan program, as they do not have the associated penalties.</p>
<p>OK, but what if all the other ways of reducing aid have been used already, but there’s still outside scholarship money left on the table? </p>
<p>Someone said that it can reduce parental contribution, but that is not true in my case. So, basically, I have X amount of scholarship money left with nothing to reduce (except the very high parental contribution which CANNOT be reduced by this money for some reason).</p>
<p>Is it possible that the scholarship is a tuition-only type and that is why it can’t reduce the parental contribution?</p>
<p>It is some school’s policies to not lower the parental contribution. If someone happened to get more scholarships than COA, then they could not accept the financial aid package - as it appears this is not the case, yes some of the scholarship money will be “wasted.”</p>
<p>As I explained above, the colleges reasoning is that you no longer have as much “need” as they define it… I am assuming this college meets 100% of demonstrated need because of this policy. Basically, the scholarships are still used, but your financial aid package is reduced.</p>
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<p>If your Bill is for $20,000, and XYZ scholarship sends $20,000 to the School, then you will owe nothing to the school.</p>
<p>It is possible that XYZ Scholarship is for tuition only, and School tells XYZ that $12,000 is tuition, and $8,000 is room and board. At that point, XYZ may only send $12,000 to the school, and you (parents) have to come up with the rest.</p>
<p>Scholarships can be used to reduce Parental Contribution AFTER all the Federal and Need Based aid is reduced FIRST. For instance, you can have an EFC of $10,000, and scholarships that reduce your cost to $5,000. The school will then give you $0 of financial aid, and you will only owe them $5,000.</p>
<p>Example: EFC of $10,000 with a COA of $15,000. School gives you $5,000 of Federal Grants/Loans, and you have a $10,000 out of pocket cost. Then, you get a $5,000 outside scholarship. School will then reduce your Federal Grants/Loans to $0 to keep your contribution equal to your EFC. School cannot apply the $5,000 outside scholarhip to reduce your cost below the EFC while still giving you Federal Grants/Loans.</p>
<p>However, if you get a $12,000 outside scholarship, then they will first reduce the $5,000 Federal Grants/Loans, and then use the remaining $7,000 to reduce your contribution.</p>
<p>I’m in the same situation that you are. My COA is around 17k. When I received my financial aid package back in March, I was receiving loans, work study, state grants, pell grants, and an ACG. I won over 8k in outside scholarships. When I reported this to my school, they took away my loan, my work study, half of my state grant, and half of my ACG so that my need was not overmet. They didn’t change my EFC, and I am still required to pay that amount.</p>
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<p>Yes. Nothing fair about it, but yes.</p>
<p>I think it’s fair. Grants, loans, and work study are financial aid for needy students based on a certain set of parent and student financial circumstances. When those financial circumstances change, it makes sense to change the aid as well.</p>
<p>^^^
There are two problems with this. </p>
<p>First, outside scholarships are intended to reduce the burden on the student and family, not to reward the school. </p>
<p>Second, if FA was always fair, then all institutions that cover 100% need would give similar packages. They don’t. My D’s packages ranged from total EFC of around $10,000 with no work study or loans, to EFC of almost $30,000, with loans and work study in addition to that as part of the FA. Can they both be fair?</p>
<p>“However, if you get a $12,000 outside scholarship, then they will first reduce the $5,000 Federal Grants/Loans, and then use the remaining $7,000 to reduce your contribution.”</p>
<p>This is not the policy of all schools. My understanding of the OP is that the school will not reduce the family contribution as is the same case with me. It will cover the Federal Grants/ Loans and then the family would still have to pay the $10,000 EFC because the financial aid package is reduced.</p>
<p>Random, I’m afraid I missed the function of outside scholarships being to reduce the burden on family and student. I thought it was to pay part of the bill for school. I do agree that it is maddening that 100% need met schools do not calculate the need the same way. </p>
<p>Mythbuster, I think Operadad is correct. Once the amount of federal aid/grants is replaced (and there is by definition no more need) then the remaining scholarship money can be used to pay the family’s portion of the EFC.</p>
<p>random,</p>
<p>Financial aid reduces the burden to the family, by placing an additional burden on the school. Outside scholarships reduce the burden to the school. The only “reward” is to the student, in the form of the pride s/he takes in his/her accomplishments.</p>
<p>Financial aid is always “fair”, because it reduces the sticker price (which many families pay), allowing some students to attend schools they would not be able to attend without the aid. If you don’t like the aid package a school gives you, you can return it and it will be used by another family. </p>
<p>The fact that aid packages differ among schools doesn’t make them “unfair.” They differ for many fair reasons, including the amount of aid available and the number of applicants who qualify for it, the degree to which a school wants a particular student, etc.</p>
<p>“Mythbuster, I think Operadad is correct. Once the amount of federal aid/grants is replaced (and there is by definition no more need) then the remaining scholarship money can be used to pay the family’s portion of the EFC.”</p>
<p>Unfortunately, this is not always true and I am correct in some cases, depending on a school’s policies. Unless we are assuming the OP is lying when they say the school will not replace parental contribution, then I am correct. </p>
<p>What I am saying is that the remaining money sometimes cannot be used to cover the family’s portion. </p>
<p>Let’s examine my case according to
[Yale</a> University Financial Aid > About Outside Aid](<a href=“Welcome | Student Financial and Administrative Services”>Welcome | Student Financial and Administrative Services)</p>
<p>"Merit Scholarships</p>
<p>Merit scholarships may replace the Student Effort component of an award, as allowed by the federal family contribution. Self Help and the Student Income Contribution may be reduced or replaced by merit scholarships. Some scholarships, such as the Gates Millennium Scholarship and NCAA Grant, may also cover the cost of the Yale Health Plan. If allowed by the awarding agency, a merit scholarship may also cover the cost of a computer, up to $2500 and with proof of purchase, for incoming students.</p>
<p>Yale scholarship is reduced if the total amount of merit scholarships exceeds the amount of Student Effort that can be replaced. The parent contribution cannot be replaced by outside resources as Yale meets need 100%: if the total of merit scholarships exceeds the Student Effort component, the need for Yale scholarship is decreased. Students may contact agencies to see if their merit scholarships may be distributed over several years or reserved for graduate studies. SFS will do everything possible, within the guidelines of Yale policy and federal rules and regulations, to make sure students benefit as fully as possible from their merit scholarships."</p>
<p>In my case, Mythbuster is absolutely right…the family’s portion of the EFC cannot be reduced by merit aid. My school’s (Brown U) financial aid website has basically the same explanation as the one above from Yale.</p>
<p>( any good scholarship search websites?)</p>