<p>Sometimes if you call the school and talk to someone in the financial aid office they tell you not to report the scholarship if it is made out to you and can be used for things besides tuition.</p>
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<p>Assume you have an EFC of $100,000, and a COA of $20,000. They can’t make you pay $100,000 if the cost to attend is only $20,000.</p>
<p>Take it one step further. Let’s say you get a $5,000 scholarship, then the net cost to you is $15,000. They can’t make you pay more than the difference.</p>
<p>Once all the aid from the school is offset, the only thing left to offset is the family contribution.</p>
<p>BTW: If they offset loans and work study, it is a benefit to you. That much less loans you have to pay back when you graduate. You can also get a job (except for work study only jobs), and use that income towards your EFC. The only bummer is when they offset grants. That is no benefit to you.</p>
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<p>The exception is if you get an outside scholarship that covers full cost. Let’s say that Oprah decides to pay 100% of your college, then there is nothing Yale can do to make your parent’s pay.</p>
<p>What about a situation where you have unmet need and get an outside scholarship. Will it be applied to the unmet need first, or will it be used to reduce federal and institutional aid first? Or does that depend on the school?</p>
<p>My S will attend a private 100% need met w/o loans school and is in a similar FA/outside scholarship situation. His school is helping him use more of his scholarship money by using “professional judgment” in reducing his FAFSA EFC based on medical expenses, state and local taxes, creating a larger “gap” between his institutional (CSS Profile) EFC and his FAFSA EFC. This “gap” exists only at private schools who typically compute their own EFC (based on Profile and/or their own FA form) in addition to using the FAFSA (federal) EFC.</p>
<p>So, my S can use outside scholarships to:
-replace the work-study component of his FA (but still work on campus for addl $$)
-fund this “gap” between the two methods of computing EFC (unmet need)
-purchase a computer (only the models designated)
-pay for school health insurance
-(if he had loans as part of his FA package, outside scholarship could be used to replace)</p>
<p>Outside scholarship money cannot reduce the FAFSA EFC even though he will have scholarship money left over. What he’s been advised to do is contact donor organizations to see if they will DEFER awarding money until the next school year.</p>
<p>I understand the differing perspectives of looking at FA/outside scholarship situations, all having their own merits and pitfalls. We will not begrudge the college benefiting from our S’s good fortune in the scholarship arena. They have been very helpful and generous with FA. Our decisions as a family have contributed to our low income and generally considered high assets. Living simply and frugally, saving for a rainy day (and college) will always pay off in the end. We will happily and gratefully pay our EFC after exhausting every means of reducing it!</p>
<p>Posh, it depends on the school. All 8 of the schools my D was accepted to (public and private) agreed to apply outside scholarships to unmet need first, then self-help aid (loans/work study), then grant reduction. Parent contribution would have been the very last thing reduced, after all other awards were replaced, but was not an issue for us as the scholarships weren’t that large! </p>
<p>I thought this was extremely fair - scholarships first help the student with their contribution (extra loans/work study) and then relieve the burden on the taxpayers/school, and finally the family. Once the full COA was met, excess scholarships would have been returned.</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.”</p>
<p>Yes, to pay part of the bill so the student doesn’t have to. I’m quite sure that if you talked to any scholarship provider, they would tell you that. The scholarship is a reward for achievement.</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>I agree with this statement, but obviously FA isn’t always “fair”. My goodness. This would only happen in a perfect world. </p>
<p>The two examples I gave were both from very highly selective schools that are major rivals. My D is on the high end among applicants to both schools. Both used institution method and covered %100 need, and have billions in endowments. From what I gather, in most cases, both offer similar packages. I believe the high end school made a mistake, which I pointed out to the FA officer. She said it would "possibly’ be changed, after I provided more info, but that would’ve taken us past the acceptance deadline.</p>
<p>Bottom line, it wasn’t “fair”. And yes, we did exercise our option to reject it. I guess my main point here is just because a “%100 need met” school comes up with an EFC doesn’t mean the familly can afford it, or that it’s a realistic evaluation of what the family can pay.</p>
<p>“The only “reward” is to the student, in the form of the pride s/he takes in his/her accomplishments.”</p>
<p>My D doesn’t need unusable scholarships to take pride in her accomplishments. She stopped applying for scholarships once she realized she couldn’t use them, so a more needy student who could use them would have a better chance. So, while I don’t have a problem “rewarding” the school my D will attend, I would rather another student gets the money.</p>
<p>Two things to keep in mind here:</p>
<p>First - The philosophy of financial aid is to come to an assessment of what the family should be expected to contribute, then help make up the balance. If you are expected to contribute X and then come up with a $10,000 outside scholarship, you can now be expected to contribute X + $10,000. Not a happy reality, but a reality nonetheless.</p>
<p>Second - Donors give scholarships as gifts and dictate the purposes for which they want their gifts used. If they’re given simply as “college scholarships,” then your EFC is going up accordingly. But if they’re given for “study abroad” or “computer hardware and software” or for “off-campus music lessons,” or if they can be delayed and kept for grad school, that’s entirely the donor’s call.</p>
<p>So, if you’re in the position of having your need-based aid reduced as a result of outside awards, see if the donors will agree to specify a certain purpose that you recommend. Explain to them that otherwise, their gift will constitute a charitable contribution to the school without benefitting you. I have a daughter in Argentina right now and another daughter in Brazil with her new laptop, all courtesy of outside award donors who specified that their gifts be used accordingly (incidentally, this was a suggestion D1 got from a helpful financial aid officer at her school prior to her freshman year). If a student cannot get the donor to specify that their gift go anyplace but to a university Student Accounts office, another possibility may be to take a summer study-abroad course through a different university rather than the one attended during the academic year. The award will then be sent to the summer university and the donor generally won’t be concerned which university gets the funds, as long as it goes toward credit-bearing academic work.</p>
<p>gadad (and everyone else), </p>
<p>I understand that’s the way it is, when dealing with FA. I don’t have to agree with it, though. :)</p>
<p>Your suggestions are excellent, and include things I haven’t seen suggested elsewhere. Thanks.</p>
<p>"Assume you have an EFC of $100,000, and a COA of $20,000. They can’t make you pay $100,000 if the cost to attend is only $20,000.</p>
<p>Take it one step further. Let’s say you get a $5,000 scholarship, then the net cost to you is $15,000. They can’t make you pay more than the difference.</p>
<p>Once all the aid from the school is offset, the only thing left to offset is the family contribution."</p>
<p>This stuff is all very obvious… but once you accept a financial aid package, the school can use outside scholarships to offset grant aid after all other forms of aid (loans, work study, etc.) are used.</p>
<p>Now of course, if you receive a full tuition/ everything else scholarship from an outside source, you can turn down the financial aid from your university, but as this is often not the case, unfortunately the school can decrease their grants.</p>
<p>BTW, in the case above as explained by operadad, there would be no financial aid package and thus these problems would not be encountered.</p>
<p>Most schools will not offset the EFC by any large amount because supposedly we can afford our “expected family contribution”. Most schools will reduce student loans / work study etc, but normally the EFC does not get reduced. Of course there are always situations in which the EFC would be reduced - ie, really smart rich kid who’s EFC is 99,999 and is paying full fare would get their EFC reduced first, because they are paying full fare and second, becuase they did not take any FA and are not bound by those rules.</p>
<p>It’s crazy I know. We only applied to a handful of scholarships - more for presitge than the money because we are getting over $30,000 from our college and if my son won any scholarship money, they would have just reduced the 30,000. I still have to pay my EFC no matter what.</p>
<p>Most schools do reduce their financial NEED packages by outside scholarships. The reason for that is because they are giving the money to students who NEED it. The money comes out of their pot that is maintained for those students who they consider NEEDY and would not otherwise be able to afford the school. It is not because they think you are so super stellar that you deserve the money over someone else. Therefore when the need disappears by getting covered by outside funds, you are no longer entitled to that money any more than any student at the school that does not have need.</p>
<p>If you get merit awards at a college, they are not reduced by outside grants. The reason is that they want you enough to give you money that you don’t need. Big difference.</p>
<p>Most schools do reduce the loan and workstudy portions of the financial aid package before touching any grants. But most colleges do reduce their financial aid packages when you get other scholarships, because that portion of need is no longer there.</p>
<p>We went through this with my sister at Dartmouth. First they said that they would reduce her grants by the amount of free money she’d won from outside scholarships. My family went in and spoke to them during her move-in, and Dartmouth let her keep her $10,000 from outside sources without reducing their grants. This was in 2004, though, so don’t know how it is now. GOOD LUCK TO YOU!!!</p>
<p>It might not be the fault of the schools’ policies. Here’s an extract from Brown’s FA web site:
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<p>There are two flies in the ointment in this discussion. 1) Who is deciding what a family can and cannot afford? Since most forms of family debt cannot be listed, by and large all that is looked at is income, but not debt. Just because someone else thinks I can afford $x does not make it true. </p>
<p>2) These outside scholarship policies also reward the rich (as most policies do). Example: I am a millionaire. I qualify for no FA – I don’t even bother applying. I win $200,00 in outside scholarships – a virtual free ride. I get to use all that. I go to college for free. My next door neighbor makes $100,000 a year. He has an EFC of, say, $25,000 per year. He wins the same $200,000 in outside scholarships, yet he will have to still pay $100,000 out of pocket over 4 years, while me, the millionaire who won those same scholarships, goes for free. </p>
<p>Anyone want to take a whack at that one?</p>
<p>Not exactly. What it does mean is the 100k family could lose all FA from the school. They still have all the outside scholarship money, and therefore get the “free ride”.</p>
<p>4th House, that doesn’t make sense at all… first of all, it is unfortunate the way the EFC is calculated and I am not denying it has significant flaws, but no one on here is arguing about what is fair and not fair when it comes to the EFC. On this thread, we are discussing how outside scholarships cannot cover the even “unfair” EFC.</p>
<p>In addition, if someone earned 200,000 dollars in outside scholarships they would not take a schools financial aid package and thus would have a “free ride.” Tell me what stipulates that someone still must pay the $100,000.</p>
<p>Basically, if you get enough scholarships that are total, more than what your EFC (can even be reduced), you decline the financial aid package altogether and you are much better off. You are allowed to apply for FA and then decline it, 4th House. </p>
<p>I took a whack.</p>
<p>Could the outside scholarships write checks to the college bookstore instead of to wherever tuition checks are received? And thus avoid going through the financial aid office which would just use the money to reduce the finaid package?</p>
<p>If your school tells you that outside scholarships must be reported, then they must. So using the funds for books won’t work (BTW, books are built into the COA, which is used in the financial aid packaging amount).</p>
<p>The excerpt from Brown cited above means this: Need for need based federal aid programs is defined by COA - EFC=Need. Need based federal aid CANNOT be awarded in excess of Need. Schools are not allowed to award institutional need-based aid in such a way that this Need would be exceeded by the combination of federal & institutional need-based aid. This would violate the definition of need-based aid, as it is aid that is awarded to meet Need. If it more than meets Need, it must be adjusted so that it does not exceed Need. If ANY federal need based aid has been awarded - Perkins, subsidized Stafford, FSEOG, FWS, ACG, SMART, TEACH, Pell - then institutional need based aid CANNOT be added to that federal need based aid in such a way that Need is exceeded.</p>
<p>kelsmom,</p>
<p>What if the school awards a need-based scholarship that doesn’t contain any of the federal aid you listed above? Does that still exclude outside scholarships?</p>