I have a question about outside scholarships. The schools we are considering for our daughter use outside scholarships to reduce student loans and work-study before reducing need based grant aid. What if my daughter needs to take out more student loans than are included in the financial aid package?
For example, if the self-help portion of the aid package (loans and work study) is $4,000, and the remaining cost is $10,000 for the parent to pay. What happens if she takes on an additional $2,000 loan amount and receives a $6,000 scholarship (assuming she needs to use the scholarship in the first year). Will the school typically apply the $6,000 scholarship to the $4,000 self help portion of the financial aid package and the $2,000 additional loan, or will they apply it to the $4,000 portion of the aid package and reduce the institution’s need based grant aid by $2,000?
Thank you!