<p>If a student's EFC is $30K, her parents need to come up with that amount, at least for year 1. Now, if she wins a competition with a scholarship of $60K, will her EFC be reduced to $15K ($60K/4) or remain the same, $30K? My understanding is that the EFC remains unchanged, but someone here may know better. This is a hypothetical question.</p>
<p>First remember that the EFC is not necessarily all the parents would have to come up with. Many schools do not promise to meet full need. </p>
<p>Scholarships generally reduce need before the reduce the EFC.</p>
<p>So in your example, say the EFC is 30,000 and the school COA is $40,000, that would mean “need” is $10,000 (though this need would not necessarily be met) If the student won a $15,000 a year scholarship then the first $10,000 would reduce and eliminate the “need”. The remaining $5,000 would reduce the EFC.</p>
<p>For a scholarship to reduce EFC it needs to be so big (each year) that it covers any “need” and then cuts into EFC.</p>
<p>For example…</p>
<p>COA of a school is $50k per year
EFC is $30k
Need is $20k</p>
<p>So, a $15k per year scholarship gets applied to the $20k need and EFC stays the same.</p>
<p>Another example…</p>
<p>COA is $30k
EFC is $20k
Need is $10k</p>
<p>So, in that case, a $15k per year scholarship gets applied to the $10k need, and then the remaining $5k “cuts into” EFC and now you pay $15k.</p>
<p>If the student’s EFC is $30,000, that is generally the *minimum *he/she will be expected to pay (unless the cost of attendance is less than that amount).</p>
<p>If the school’s cost of attendance is $50,000/year, for example, at a school that meets full need (most schools do not meet full need) the sudents need would be COA - EFC = need, so $50,000 - $30,000 EFC = $20,000 in need.</p>
<p>The family would pay $30,000 in cash (or other funding, such as PLUS loans) and the school might provide $20,000 in financial aid - which may include student loans and work study.</p>
<p>If the student were to win a $60,000 scholarship to be paid $15,000/year, that would be considered a resource. The student’s need would then be COA - resource - EFC = need, so $50,000 - $15,000 scholarship - $30,000 EFC = $5,000 need. The financial aid would probably then consist of a student loan.</p>
<p>Many schools will allow a student to replace all or part of their subsidized Stafford and/or Federal work/study with a merit scholarship and preserve some of their institutional grant, but you would have to discuss that with each individual school.</p>
<p>In general, until all need-based aid has been replaced, merit scholarships are not applied to the EFC.</p>
<p>If the student attends a school with a lower cost of attendance, such a scholarship would reduce the EFC. If, for example, the school’s cost of attendance was $20,000, the scholarship would reduce the amount expected from the family to $5,000.</p>
<p>A lot depends on how your aid is structured. As alememom says, it all depends</p>
<p>For example
COA $50,000</p>
<p>Package is:
EFC $30,000
Grant $10000
Work Study $3000
Loan $7000 (Stafford Unsub + PLUS)</p>
<p>Now you get a scholarship of $15,000. </p>
<p>Colleges may now re allocate FA in many different ways. They may remove the work study component and the loan component first, and then reduce the grant.</p>
<p>New Package Option 1 is:
EFC $30,000
Grant $5000
Work Study $0
Loan $0
Scholarship $15000</p>
<p>Or the school might decide the grant and work study go first
New Package Option 2 is:
EFC $30,000
Grant $0
Work Study $0
Loan $5000
Scholarship $15000</p>
<p>Or if they are really nice they could keep the grant the same and reduce your EFC (unlikely but possible)</p>
<p>It depends on the school’s rules and on whether this scholarship is their own money or an outside scholarship. </p>
<p>Using the given example of a school that meets full need and costs $50K, parent contribution $30K, scholarship of $15,</p>
<p><em>if</em> the scholarship is a school scholarship, then what alemom wrote (that tehy would just offer a loan for the remaining $5K in need (basically, mazewanderer’s Option 2)</p>
<p>if the scholarship is an outside scholarship, then schools vary on what they would do but all of my kids’ schools would reduce the loan and work-study first so the student would end up with the $5K in remaining need being met by school grants, no work-study or loans (mazewanderer’s Option 1)</p>
<p>All that said, most schools do not meet full need. There are a lot of schools where the EFC is $30K, the school costs $50K and all the school would do is: </p>
<p>EFC $30K
Work-study $3K
Loan $7K
and that’s it-- so the student is gapped $10K</p>
<p>In this case, the $15K scholarship would probably fill the gap and then reduce the loan or work-study.</p>
<p>I think I got it now. If a kid can get some scholarships from outside the school, it’ll translate into savings for the parents when the student attends any colleges expect perhaps for the few that meet full need.</p>
<p>What is your situation?</p>
<p>ARe you trying to reduce EFC?</p>
<p>^ I’m not anywhere yet, just thinking/dreaming.</p>