At least for the schools my son’s considering to enroll, we are required to report any outside scholarship which will reduce the amount of the grant. Not that he applied for any, what would be the point trying to get it if that amount will get subtracted from the financial aid?
Some schools do allow stacking of scholarships.
If you are full pay, you get to keep the money.
Lots of families get no FA, scholarships are nice.
Financial aid = COA - EFC
If you get a scholarship from college or outside it gets added to your EFC. When EFC goes up, financial aid comes down. Some schools let you stack but NU doesn’t.
Generally subtracted from need-based aid, but not necessarily merit aid.
Need-based aid is --stand by for this-- based on need. When your need is reduced by an outside scholarship, the school can redirect the institutional money that you would have received to another student. That’s a win! In reality, many schools that reduce need-based aid because of the receipt of an outside scholarship will first reduce any loans and/or work-study offered to the scholarship recipient before reducing actual institutional grant money.
The overwhelming majority of schools **do not meet ** 100% demonstrated need. Outside scholarships helps to close the gap in the financial aid package.
Your student would be bound by the renewal terms of that outside scholarship rather than by the renewal terms of the college/university itself. Also, the outside scholarship might go with the student to another college/university if the student transfers.
some colleges will first reduce the loan amount before reducing the grant… so if you win an outside scholarship that replaces your loan- that’s a win-win!
Yes, some colleges allow limited stacking where an outside scholarship first replaces student loan and/or work expectation and unmet need (if any) before reducing need-based financial aid grants.
https://financialaid.stanford.edu/aid/outside/
https://fas.ucsd.edu/types/scholarships/index.html (scroll down to “FACTS ABOUT SCHOLARSHIPS”)
However, if the college reduces grants first, then there is no advantage to getting an outside scholarship, unless the student transfers and can take the scholarship to the next college where it can replace something other than grants there.
It’s nice to earn a scholarship, an honor.
Often even the most generous schools allow the students to keep outside scholarships to first pay incidentals like travel, a computer, book money, and then may take the loans out of the financial aid packages before reducing need based aid from the college.
Sometimes the outside scholarships will allow the student to delay receiving the funds until grad school.
As @ucbalumnus noted, some colleges do stack.
For example, Yale will first apply outside scholarships to reducing or eliminating the expected student term time and summer earnings contribution. Additional outside scholarship funds above the amounts needed to replace the student contribution can also go towards the purchase of a computer. At Yale, the student contribution is about $6000/year, so up to approximately $24,000 in outside scholarships would “stack” before any reductions in Yale institutional support.
As @twoinanddone noted, some outside scholarship awards (notably the high dollar value major science awards like Regeneron, Intel, Siemens, etc.) permit delaying disbursement until grad school and allow the student to specify the amount of scholarship disbursed from their account each year.
If for example, a student won a $50,000 scholarship they could direct $6,000/year for four years to replace their undergrad student contribution, and then “save” the remaining $26,000 for grad school.