My daughter has applied for several local scholarships. She recently received an offer for a full tuition scholarship at the school she will be attending leaving a smaller balance of costs than we originally expected. If she gets all of the small scholarships (unlikely but possible) that she has applied for and the total exceeds the balance for the remaining costs at her school, does she have to turn down the scholarships that put her in excess of the total cost of attendance?
No, unless that is a requirement of those scholarships.
But scholarships, grants, aid (but not loans) that exceed tuition, fees, books are taxable (subject to kiddie tax) at potentially the parents’ rate in excess of certain limits.
You can ask local scholarship providers to cut the check in January instead of fall if the helps reduce the income subject to tax.
Familiarize yourself with IRS Publication 970.
That’s a good idea re: January. I will take a look at Pub 970. Need to familiarize myself I guess.
Thanks by the way!
You are welcome!
I asked two of the local organizations that awarded my kid scholarships to wait until January to send the check. They were happy to oblige.
You need to find out what the college will do. there are some schools that are sticklers about merit, and they will reduce their own award if merit exceeds a certain amount.
I’ve seen schools that will only allow merit up to tuition (not COA). In those cases, if they award full tuition, and then there is outside merit, they will reduce their award so that the total merit is at tuition.
Some do this so that they can “spread awards” around to more students.
Thanks @mom2collegekids you are so knowledgeable about the financial side of things. When my daughter received the phone call from admissions telling her that she was being offered this full tuition award, my daughter asked if the outside scholarships could be used toward her room and board if she were awarded any and she was told yes. I guess I should double check that. My daughter has knocked out a bunch of these local scholarship applications during the last two or three weeks, and I realized that if offered them all (unlikely) that they could add up to the balance of her bill and potentially go over. Like my husband says, “five hundred here five hundred there, before long you’re talking about a bunch of money.”
Congrats to your D, @NorthernMom61 for having the initiative to seek out piles of local scholarship applications, and especially for landing a full tuition scholarship at her school.
In some cases, especially depending on the local job market for young people, a student can do much better getting a few scholarships than she could do by trying to get a part-time job.
Also, some schools allow outside scholarships up to the amount of work-study and/or loans that the student otherwise could have taken, before they start reducing their grant money. So it’s a goot idea to check with the school.
Thanks, we are proud of her and thrilled with this latest offer. You are correct, we live overseas and there is limited opportunity for high school students to have jobs. The small scholarships that local groups offer are worth going after.
I would email the scholarships office, and then SAVE their response.
Where my kids attend, as long as the scholarships are purely merit based, the student can keep all the extra. For need based money, students are not allowed to keep any extra, so the amount of their awards are decreased so that the student has a full ride but no more. Some scholarship apps specifically state that the student can not accept it IF he/she already has scholarships totaling a particular amount (one I have seen has a $40K limit). So I guess you will need to confirm the rules of the individual scholarships as well as the university’s policy. Congrats!
Great points all. We didn’t qualify for any need based aid. All are merit based, but again I will check. Thanks.