Scholarships Finally Hurt Us

Paying for College
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<p>GRRRR!!! I have a feeling I'm going to be on the phone with dd's school for a long time Monday afternoon when I get home from work.</p>

<p>Daughter JUST was notified she won another $1000 scholarship last week. The check was made out to the college; we sent it right off to them. I understood that at some point scholarships might erode her financial aid from the college, but this last $1000 seems to have hurt us more than helped us. We got the revised aid pkg. on Saturday. I sent them an extra $1000 scholarship, and as a result she lost $1250 in federal work study along with a $750 Perkins loan. I could understand if we lost a total of a thousand in loans/work study, and that would be fine---it would be money we would not have to pay back (the loan) or come up with out of pocket (the ws). But it seems by having a scholarship for $1000, we have actually LOST $1000 in aid. Her prior revised financial aid pkg., after we claimed the first set of scholarships, was for $47100. Now, with the last $1000 scholarship listed, our total aid pkg. is down to $46100($750 loan plus $1250 work study lost for a total of $2000 gone, then add the $1000 scholarship=net loss of a thousand). This total aid pkg. includes all her other outside scholarships. Makes no sense to me.</p>

<p>In addition, I requested the additional $2000 in unsubsidized loans for daughter. According to her original paperwork, I was led to believe everyone is entitled to this loan if they wish, even though it was not part of her original aid pkg. My thinking was that this loan is a lower interest rate than the PLUS loan I am taking, so I would replace $2000 of my PLUS loan with the unsubsidized Stafford, and pay it off for her before she even graduates and any interest can accrue. Instead, what the college did was REDUCE her SUBSIDIZED $3500 loan by $338 and give her ONLY $338 in an unsubsidized loan, which also makes no sense to me. If for some reason she cannot take the $2000, why wouldn't they just tell us so, as it is cheaper in the long run to keep her original subsidized loan rather than reduce her subsidized loan and replace part of it with an unsubsidized loan. </p>

<p>Gosh. I consider myself a fairly intelligent person, but this part of the whole college experience is very confusing to me.</p>

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<p>Been there, done that. Bust your butt and suffer for it, sometimes. There are federal guidelines that determine subsidized vs unsubsidized Staffords, and she must have passed that point. You can call and request the largest amount possible in an unsub loan.</p>

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<p>Your D absolutely can take the full 2000 (or whatever) unsub loan as long as the total aid she gets is less than full COA…which it sounds like it is. </p>

<p>You need to call them and tell them to put in the full unsub loan. </p>

<p>If you have any EFC at all to pay, then obviously there is unfunded COA.</p>

<p>You might as well ask for $1000 W/S back as well…since the 250 loss and Perkins loss is 1000.</p>

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<p>Sometimes the people who post scholarships are not financial aid officers. In the office where I worked, clerical staff posted scholarships. They simply reduced the subsidized portion of the loan if necessary to keep aid at COA-EFC-all need based aid. As a result, students would have eligibility for unsub but would not be offered it, as these staff members did not have the authority to adjust aid beyond reducing to add the scholarship. In some offices, those who are adjusting aid to post scholarships may be authorized to adjust awards but may not be as well-versed in regulations as an aid officer might be. I mention this because I think this may be the case for your D. I think you should speak directly with a financial aid officer & ask him/her to review the account to see if the awards are correct. If they are, the officer needs to explain why they changed as they did (because what you are describing is not correct — more about that later). If it is wrong, they can help you by adjusting things & explaining any necessary forms to request unsub if they need your D to formally request the unsub.</p>

<p>Now for the “what you are describing is not correct” part … it is possible that the original awards were incorrect & they were corrected when the scholarship was posted. If that is the case, then the revision you see may be correct. Of course, the aid officer would explain all of this to you when you call, if this is the case. Mistakes do get caught eventually on clean-up reports, but they can get caught sooner if the account is touched to add something before they get to the clean-up report. A possible explanation for something like this would be an original FAFSA based on estimates … the aid gets packaged based on the estimate … then the FAFSA is updated & results in a higher EFC. The aid office will eventually find the overaward, but it doesn’t always happen in what the student/family might consider a timely manner (but in the aid office, it is one more task in the huge queue of “things to do”).</p>

<p>Hopefully it is just an incorrect adjustment. In any case, hopefully you will reach someone who can explain it to you & fix it if necessary.</p>

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<p>I would replace $2000 of my PLUS loan with the unsubsidized Stafford, and pay it off for her before she even graduates and any interest can accrue</p>

<p>Doesn’t the interest on an unsubsidized loan start to accrue the moment you take out the loan?</p>

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<p>Ooops. njblue, you are correct. I misspoke about the unsub. loan; the interest does start immediately. The reason I want her to take it is to replace a portion of my PLUS loan, and then I’ll pay it off before she graduates.</p>

<p>Kelsmom and mom2collegekids…thanks. As usual, you both have great advice and wisdom to share. I was pretty sure my daughter was still entitled to the unsubsidized loan; I found it weird that they cut her subsidized loan by a few hundred and replaced only that amount with an unsubsidized loan. Her explanation for each line of her aid offer STILL says she is eligible for a $2000 unsub., so I am guessing you are right and it is just a simple error.</p>

<p>My FAFSA was complete when we received the original aid offer; in fact, once I sent my tax forms in (this school verifies virtually everyone), my EFC went down a bit because the school changed something. And yes, you are correct that I still have to pay in order for the COA to be covered, so obviously that’s not why they reduced her total loan pkg. by twice the amount of the additional scholarship. I understand eliminating some aid on a dollar for dollar basis, I just don’t quite understand why they did what they did. Just kind of stinks that we got the letter on a Saturday, so I’ve spent a good part of the weekend worrying and wondering. </p>

<p>As I recall, at least one of you works in financial aid. You must receive many calls from irate parents. I promise I’ll be calm, cool, and collected, no matter what the outcome. I am very, very happy with the aid this school has offered (ecstatic, actually, as it was my daughter’s #1 choice, and even though it is quite expensive, after her financial aid, it only ended up being slightly more to attend than our state flagship would have been). My thanks to all!</p>

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<p>I worked in financial aid until a few weeks ago (have a job in a different field now). Yes, parents were often upset … but that is understandable when money is involved. What I appreciated was when a parent would say that she wasn’t quite sure if the awards were adjusted correctly & would I please take a look to see if they are correct? If they were correct, I could explain … if not, I was happy to help by making the necessary adjustments. </p>

<p>Given the facts of your last post, I would think it was probably an error when adjustments were made due to posting your scholarship. I will warn, though, that sometimes even a small scholarship can throw things off quite a bit at a college that uses Profile. This is because federal aid is awarded based on the FAFSA EFC & institutional aid is awarded based on the Profile EFC. Although many times the Profile EFC is higher, that is not always the case (it wasn’t for my family). In some instances, a $1000 scholarship could potentially throw the federal eligibility way off. </p>

<p>The bottom line, though, is that your D would be eligible for $5500 in Stafford loans. Even if she had no sub eligibility, she would still be eligible for $5500 unsub. It seems like someone “in the know” just needs to look at the account & possibly make some adjustments.</p>

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<p>If the school’s award package is correct, then can you un-accept the scholarship and ask the college to send the money back to the awarding agency?</p>

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<p>Whoa! How much of that package is free money? What were her stats?</p>

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<p>Am I misreading this. Her prior package was $47100…not with the latest $1000 scholarship it is $46100…isn’t that $1000 difference?</p>

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<p>OH…I think I “get it” now…the award is $1000 less…and that INCLUDES the new scholarship.</p>

<p>Call the finaid department. It might just be a clerical error.</p>

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<p>Well, I’ve got an explanation…I think I understand it, but it still kind of stinks. But, on the other hand, daughter will not have as much in Perkins loans to pay back. Unfortunately, she did also lose her work study, but at least I don’t have to come up with that money upfront. Bottom line is, while her TOTAL pkg. did get reduced by a grand due to the last scholarship she got, I still have less out of pocket to come up with (I think—lost $2000 in loans/ws, but $1000 of it replaced by the scholarship, so only a net balance of $1000 for me to cover in lieu of the $2000 taken away (which in the end I would have paid for eventually)----I hope I am making sense.</p>

<p>Apparently, since the bulk of her scholarships were one time only, they were applied to the fall semester. I asked if they could be split beteween the two semesters, and the financial aid person said only if we signed the checks over to the school. Sadly, we have already cashed the checks and deposited them into the bank in preparation for paying tuition. The financial aid officer’s explanation of why they apply scholarships only to the fall unless the granting agency specifically designates it otherwise is that in the case of a student withdrawing from school, if they applied the money to both semesters, they would not have the money to return to the issuing agency, and I guess they figured the student won’t return the money on their own. I understand this reasoning, too. She said it has been an unusual year in that a lot of kids have won scholarships that they had to apply fully to the fall semester, and it ended up biting them in the butt. (my words, not hers). </p>

<p>As for losing the $338 in subsidized loans (which is only for the fall semester), that is because with all her scholarships, she actually has too much money for the fall sememster to qualify for the full amount. Like I said, I wish I knew about signing the check over to the school…I would have been happy to do it. Oh, well, live and learn, I guess. I can’t complain about my dd winning scholarships. </p>

<p>As far as the unsubsidized loan I requested, she said it was showing on her copy of the letter, and that probably somebody sent out the revised aid letter too early. She will be sending me a new revision. I’m assuming the bulk of the unsub. loan, with the exception of the $338 for the fall semester, will be applied to the spring semester.</p>

<p>To the poster who asked about my daughter’s stats and her pkg., her pkg. did include $3500 of subsidized loans originally, along with $1500 in Perkins loans and $1250 in work-study, so it wasn’t all just “free” money. I was very happy with the original pkg, as I know they could have given her more loans. She was awarded the school’s top scholarship, which just this year was increased from $15000 yearly to $25000 yearly, renewable as long as she has a 3.00 gpa, except for the first year it only needs to be a 2.75. I think the school said they awarded around 48 of these for a class of app. 750, and were hoping 38-40 students accepted them. She was also given almost $11000 in grants. One of the reasons I love this school is they are not known for reducing aid in subsequent years, which will be important as my income this year, and especially next year, will be lower, as I am a single mom and alimony stpped the beginning of this year and child support will stop in October. Having said that, my income is certainly not poverty level, but neither is it very high. I can afford to live in a high col state somewhat comfortably, but I do know how to squeeze a penny till it screams.</p>

<p>Her stats were 4.39 gpa (salutatorian of a class of app. 350), some leadership positions in a few ecs, but not to the number I have seen some kids on here, along with a few various things like organizing a blood drive and tutoring. Honestly, her SATs were not stellar. Her PSAT score barely put her in the commended category. I don’t know if it helped that she was allowed to send two schools notice of her interest in them because of being commended, and this school was one she notified. I think where she shined was her ACT score, and she didn’t even want to take it. I can’t stress enough to those going through the application process—try both the SAT and the ACT. The first time she got a 32 composite, with a perfect score in English and near perfect in reading, along with a semi-pathetic (to her) math score. That whetted her whistle, and she wanted to try again. Did not score any 36s on any sub-sections the second time, but raised her math score and got a 33 composite. Really good, but don’t forget, her SAT scores were not as good. We chose to send the ACT scores, obviously. Honestly, when we went to the day the school held for the kids who were awarded these scholarships, they read a list of some of the things the kids had accomplished. My daughter turned to me in awe and said, “How did I get this scholarship?” I don’t know for sure, but we feel very blessed that she did. Her original total pkg. left only a small gap between aid offered and my efc, in contast to other schools where she was awarded their highest or next highest scholarship, but we were still left with gaps of $10000-20000 exclusive of my efc. </p>

<p>Gosh, I can be long-winded.</p>

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<p>Thanks for the thoughtful response! And congrats on your daughters scholarships and accomplishments. Not many people can get a lot of scholarships. I’ll definitely be trying out the ACT to see if I can beat my 2100-ish SAT. Success to you and your kids(s)!</p>

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<p>Can someone explain this to a student planning on doing 1000$ scholarships who needs financial aid? Should i apply or not for these scholarships?
I’m really confused on some terms COA, and Perkins Loans and subsidized</p>

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<p>Please use old threads for reference only. This thread is almost 3 1/2 years old. Start a new thread if you would like to ask a question. I am closing this thread.</p>