Outside Scholarships Reducing Parent EFC

<p>I am going to Brown next semester. Brown has offered me 38,000 in grants in scholarships and my parent's EFC is around 24,000. If I receive more than 38,000 in outside scholarships, then will my parent's EFC be reduced?</p>

<p>No See <a href=“http://www.brown.edu/about/administration/financial-aid/outside-scholarships-and-your-financial-aid-package”>http://www.brown.edu/about/administration/financial-aid/outside-scholarships-and-your-financial-aid-package&lt;/a&gt;

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<p>You need to ask…since YOU are talking about getting MORE merit than aid.</p>

<p>That policy varies with school. Nevertheless, I don’ think that is federal regulations that prohibit getting outside scholarship from reducing out of pocket cost below EFC. There are many schools that would allow stacking internal and external scholarships up to CoA and even a little bit more. Some schools would allow a certain amount before they start to take away other aid. The schools usually would start from reducing the grant, loan, and work study as the need is reduced by scholarship. Even the need is affected by the scholarship, the EFC calculation is not. The question is whether the school would allow external scholarship to cover part of the EFC. When there is no longer need-based aid involved after offsetting all the loan and federal grant, I don’t see how the Federal regulation would prevent external scholarships from reducing parental contribution. In Brown’s situation, the outside scholarship will first offset the student Summer earning, work study, loan, and then the scholarship (need-based) from Brown while maintaining the EFC. If you get outside scholarships large enough to replace all aids from Brown, you can then have lower family contribution. Nevertheless, Federal Regulations may prevent you from using external scholarships to reduce family contribution while receiving need-based aids. Otherwise, it would be ridiculous for someone with $65k EFC and not eligible for any external merit scholarships.</p>

<p>You have two things going on here. You have your Parents FAFSA EFC and what Brown expects from you and your family. Federal rules do not permit students to get need based aid that reduces the FAFSA EFC with the exception of the PELL Grant. So your outside scholarships will have to be used to reduce federal aid if you are getting more than what your need is as defined by COA less EFC with the exception of PELL. However, in the OP’s case PELL is not in the picture. If your EFC is $24K, you and your family will have to pay $24K before you are eligible to get federal funds in the way of subsidiized loans, SEOG, work study, and any other FEDERAL funds or other funds that have that stipulation with the FAFSA EFC. </p>

<p>As you can see, however, it’s not as though there is always a whole lot of federal money in an aid package from school with price tags in the mid $60K range. Especially at a school like Brown that does not (or did not ) give out student loans as aid. So you lose the work study, maybe the SEOG; they get replaced by the grants.</p>

<p>However, where an issue arises is Brown’s in house policies on financial aid, and I don’t know what they are. Many schools do have policies that there is a bottom line contribution that has to be met before they will give out any of their own funds as well. The way many such schools treat outside scholarships, is that they first reduce any self help such as loans and workstudy, but then if there is still more money, they start reducing the financial aid that the college has awarded. Some on a a dollar for dollar basis, some at 50 cents on the dollar, some not at all. Some do allow the expected family contribution to be met by the scholarship but will not give financial aid so that the student gets more than the official COA. Some schools do allow stacking. Some integrate PELL into all of this and some do not. This is where it schools can differ widely, as some schools will just take the outside scholarships and have it replace the school grant FIRST and then work its way to other things. That’s something a student has to read up on the web site as to how a particular school operates with outside scholarship and call the financial aid dept with any questions. </p>

<p>I know of three like schools–one takes the outside money and immediate applies it to their grant money so that the financial aid package and what the family has to pay remains exactly the same whether there was a scholarship or not unless the scholarship exceeds the award. Another will put it towards self help and federal money first, and then reduce the school’s grants, so that again the award remains the same if the outside award “eats” up the aid package. Though when the outside grant, in those cases takes the place of the Direct Loans and Work study awards, it frees the student to take the DL on an unsub basis (if COA is not met) and the student has freed up time to get an outside job and pocket that money. The third school will allow the student to keep the awards other than those not permitted under federal law and so the student can “make” money going to college. </p>

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I got the following from Brown’s website:

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<p>That is true 4Kidsdad, but that is in the context of getting federal aid. Someone who does not get ANY financial aid certainly is getting parent/ student contribution directly reduced by outside scholarship. You just cannot get federal aid (other than PELL) until you meet your FAFSA EFC. </p>

<p>$60K cost. FAFSA EFC =$20K No federal aid (no SEOG, Perkins, Workstudy subsidized Direct Loan) until family pays $20k But if the college wants to give the kid $50k out of its own funds, that fine. Or if the college gives $40K in its own funds and the kid gets $20K+ in outside awards that fine, too, for the feds. What cannot happen is that the school gives $30K, $10K in Work study, SEOG, DL, Perkins are given and then kid get outside award of $10K. Something has to give here. Either the school decreases award to $20K, the fed aid is reduced or outside award declined so that the student’s family pays $20K before any federal funds come into the picture. </p>

<p>@4kidsdad I know you got it from Brown’s website, I just point it out that it is not reasonable when one has no federal financial aid and not eligible for external scholarship. So the Federal Regulation wording is not exactly the way it said.
@cptofthehouse Brown’s page said they will reduce their aid dollar for dollar by external scholarship exceeded the need.</p>

<p>Billscho, that is typical. The way it works usually with the more generous schools that meet full need by their own definition, is that they will first reduce work study (which frees up hours so that the student can work and put that money towards EFC), then loans (which Brown and other such school might not even include in their fin aid packages), Students can then take out he Direct Loans totally on an unsub basis and use that to pay EFC, then lastly grants are reduced. </p>

<p>Yes, that is typical. I am just responding to your statement above.

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<p>But this student is asking…</p>

<p>if COA is 62k
and he gets institutional and fed need-based aid of 38k
and his parents have a family contribution of 24k</p>

<p>and… if he is NOW award some mega, mega scholarships that are larger than 38k…(say $50k of merit)…would that reduce what his parents have to pay…and usually that is YES</p>

<p>I think that we can pretty much agree that Op is not eligible for Federal aid other than loans.</p>

<p>to piggyback on 4kidsdad post, should Op receive 38k in outside scholarships, Brown states that they will reduce the self-help portion; </p>

<p>Student Contribution from Summer Earnings
Work-Study/Campus Employment Expectation
Loans
then they will reduce their University Scholarship.</p>

<p>Your 38k will essentially be a wash; you will have no need based aid and your parents will still have to pay their EFC. However, Op would still be able to borrow his $5500 to help reduce his parents EFC.</p>

<p>The OP is asking what will happen if his outside scholarships EXCEED the full amount of Grant need based aid he is awarded.</p>

<p>OP…in addition to your grants, did you get any other need based aid from Brown…loans, work study, etc? Because if you did, you need to add that to the grant total. So for example, if you got $2000 in WS, your total aid would be $40,000.</p>

<p>Brown will reduce every penny of your need based aid by the outside scholarships,you receive. So in theory, if you got $40,000 (using my added WS money) in outside scholarships, you Brown aid would be reduced by $40,000.</p>

<p>If you get $60,000 in outside scholarships, yes…you would be able to apply the WHOLE $60,000 you get to your bursar’s account to pay the Brown bill for the year. But you wouldn’t get a nickel of aid from Brown.</p>

<p>You would then, however, be able to request the $5500 unsubsidized Direct Loan.</p>

<p>BUT…if you only get $20,000 in outside scholarships, your Brown aid will be reduced…not your family contribution.</p>

<p>But really…where are you hoping to get a HUGE in excess of $40,000 outside scholarship now? Do tell? It might help others.</p>

<p>Sybbie has summed it up in a nutshell. That is if, the student got federal loans in the package–is Brown a no loan school? Work study would disappear too, but the student can then use that time to work at non WS jobs and use that money towards parental EFC.</p>