<p>On a Yale information sheet given to us it states that outside aid that exceeds the student effort can only be used to reduce Yale's need aid and not be used to reduce the family contribution.</p>
<p>So let's say my family makes 60k a year. Yale gives me 25k a year and my expected family contribution is 13k and the student effort is 2k.</p>
<p>If I receive a 10k scholarship from let's say...Coca-Cola, that 10k cannot be used to reduce my family contribution from 13k to 3k? It can only be used to reduce the Yale aid from 25k to 15k, benefiting the university?</p>
<p>Then what's the point of applying for scholarships if they can't be used to reduce the family income? (I realize that 2k of the 10k will cover the student effort).</p>
<p>Good question. Unfortunately, there is no point, aside from the honor. This is not just Yale's approach, but all the schools'. However, keep in mind that they start subtracting first from you summer earnings expectation, then from your school-year earnings expectation, then from your loan, and last from your grant. So at least you don't lose grant money until you've received quite a bit of outside scholarship funding.</p>
<p>Yup, there's no point to applying for free scholarship money. Let it go to someone who appreciates it, or someone whose EFC is 100%.
(sour grapes)</p>
<p>Different schools do it differently. S1 went to Penn. Their grant offer was reduced by the amount of his outside scholarships. After our freshmen year learning curve, he didn't bother applying for any more.</p>
<p>S2 goes to Juilliard. They say, "Hey, we know going to school is expensive, and we want to encourage you to get all the help you can. Our scholarships are not at all affected by anything else you get." Needless to say, we like this approach better.</p>
<p>Lots of times the scholarship money is taken first from loans and then from work/study at least at Pomona, check with each school. The other benefit is that if you make more money one year you will not be penalized you will still get the merit. Not tons of benefits but still worth it</p>
<p>For my son at Stanford, outside scholarships reduced loans first. Then, if they were more than the loans, they reduced the grant money. Because he had a couple outside scholarships, he was able to graduate with a very small amount of loans to pay back. So the outside scholarships were definitely worth it in his case.</p>
<p>It arises from a view at the school that there is an appropriate "stake" that you should hold in your childs education. That is, the contribution that they believe is appropriate for you is their idea of what it "ought" to cost you out of pocket. </p>
<p>A friend of mine who is a Princeton grad was unhappy when Princeton went to the increased aid, no loan policy several years ago, because he felt kids and families weren't paying enough.</p>
<p>At Amherst, my D's scholarships went to eradicate loans and work/study. The rest went to the school. My amount stayed the same, but D's amount went up by $200.00. So, the outside scholarships helped because my D will be able to attend without having to work. A plus the first year, when the kids need to adjust to a different learning and social environment.</p>
<p>The bottom line is that EFC is your expected FAMILY contribution...not your expected scholarship or aid contribution. EFC is what your family's calculated contribution is supposed to be for your college expenses. If you receive aid from other sources, that is NOT family aid.</p>
<p>"If I receive a 10k scholarship from let's say...Coca-Cola, that 10k cannot be used to reduce my family contribution from 13k to 3k? It can only be used to reduce the Yale aid from 25k to 15k, benefiting the university?</p>
<p>Then what's the point of applying for scholarships if they can't be used to reduce the family income? (I realize that 2k of the 10k will cover the student effort)."</p>
<p>Typically, financial aid packages consist of grant (scholarship), loan, and work study.The student also is expected to earn $ during the summer.</p>
<p>It's worth it to get outside aid if the scholarship money can be applied to reduce the student's loans, work study or summer earnings component.</p>
<p>aid - loans, grants, work studies
grants = scholarships, which means $ that you get that you don't have to work for (except by remaining in school and possibly keeping a certain major or gpa) or pay back.</p>
<p>When colleges talk about "financial aid," they mean grants/scholarships, loans and work study. Theoretically, a college could offer an aid package that consists of just $20,000 a year in loans, which is what some students have posted on CC about being offered from colleges. IMO it's virtually never a good idea to carry that much in loans for a year of undergrad.</p>
<p>The average college student takes out about a total of $20,000 in loans to cover 4 years of colleges. At places like Harvard, the average total amount of loans that students take out for 4 years is less than $10,000. The pricey colleges with the huge endowments like Harvard can afford to be more generous than can lower priced colleges that don't have much $ to offer for scholarships.</p>
<p>Colleges have different policies - some split outside awards 50/50 with the family, which creates some incentive for the student to keep applying. It doesn't take a PhD in econ to figure out that if there is zero benefit to the student, that student won't take the time to fill out lengthy forms and compose original essays.</p>