<p>Isn’t the student contribution considered a part of the EFC, or not? That Stanford page has no loans in any of the scenarios. At many schools the outside awards will reduce/eliminate the student’s expected contribution from both work and loans, and possibly also unmet need, before they start cutting the university grants. So if there were a $5500 student loan in the calculations, that might also be eliminated. That is reducing the EFC, just not the parent part of it. And the student can work and earn money anyway, just not with work study. If the student works anyway and pays that money towards college, that reduces the needed parent contribution. Up to say $10,000 or so of outside awards can be a real benefit, depending on the original package. After that, the scholarship has to be big enough to also replace any university need-based grant before it begins to benefit you directly by reducing your parent contribution. But call each school to ask about policy, as ucbalumnus says.</p>