Scholarships from high school

If the student is applying for aid, then the school or whoever is processing the request or providing the aid has the right to make reasonable inquiries.

At my son’s school the recipient is required to coordinate with the school. As I read it, even if the check is made out to the student, they are not allowed to cash it. It has to go through the university. Definitely check in with your school to see how they handle it.

If the school is not processing any financial aid (for instance, acting as an agent for the federal DOE to facilitate a Pell grant or federal guaranteed loan) or providing any institutional financial aid, I see no reason why a student would be “required” to coordinate the receipt of an outside scholarship with the school. This would be the school butting in where it has no business.

No. Under the scenario above, if the check is made out to the student, the student should be “allowed” to cash it, deposit it, whatever, without interference from the school. What makes the school believe that they have the right to dictate how an outside scholarship check is handled, when the school has no role in processing or providing financial aid for the student concerned?

Hey, @BelknapPoint, I shared my son’s school’s policy, as I understood it. No need to get all snarky. If you don’t like the policy, then don’t send your DC to Purdue. Here is a copy of what is on their website.

"All money from a private donor needs to be processed through Purdue University. This is for your benefit as well as for your donors benefit.

Even if a check is made out only to you, it needs to be processed through Purdue University. DO NOT cash the check first and then send us a new check. This check cannot be processed as a scholarship/private award. We must process the original check."

@jmek15

Interesting…since the OP received a scholarship award in middle school. Clearly…the student had NO idea where he or she would be attending college. In the OPs case, the money WILL be sent directly to the college…when the time comes.

But…my kids received awards in 10th grade…by check…to them. Clearly, we couldn’t hold onto those checks to give to unknown colleges until two years later…just couldn’t happen. Checks need to be cased within a certain window of being issued.

But we DID notify the colleges of the awards.

Betting Purdue would understand!

Purdue must have a unique banking arrangement as most banks do not process third party checks, and that’s what this would be if the student signed over the check.

I’d say in most cases the additional $1000 will not matter and all other aid will remain the same. Cases where it could change things are for athletes or where a student is on 100% financial aid and even the smallest amounts will require some adjustment to aid to stay under the federal regs. My kids each had $2k in outside scholarships and it didn’t change anything. I just let the schools know (didn’t sign over the checks) and they did nothing with the information. The amount was NOT included on the 1098-T form.

No snarkiness. Does Purdue provide any rationale as to what “benefit” comes to the student and donor if the school becomes involved in this transaction, when it would otherwise have nothing to do with a student’s financial aid?

Is that quote from Purdue on the general information page or on the FA page? Purdue may think it is clear that it only applies to students who receive FA if it is on the FA page. I’ve found a lot of unclear statements on college websites and then I’m told “But that doesn’t apply to you.” Okay, why does it say XXZ on the website but you really meant XX but not Z?

@BelknapPoint sorry for being short tempered!! I knew when I pressed Post Comment that I would regret it, and of course now I do. Not an excuse, but the nice young woman who sits near me at work got laid off today. I was really annoyed at the way it was handled, and I felt terrible for her. Again, sorry! I’m not usually so snappish!

My initial comment was offered from the perspective that since different schools have a wide range of approaches, the best thing to do is check with your school directly. I agree with @twoinanddone that websites aren’t always clear about which policies apply under which circumstances, and Purdue has left me perplexed on a few occasions. Fortunately, they have a Facebook group for Parents of Accepted Students so it’s been easy to get clarifications.

^^^
I appreciate your words; no worries. And I agree that websites can be confusing when they attempt to parse jumbled policies into a few paragraphs.

My main point is that a school shouldn’t be involved in the financial matters of a student’s family, when the only existing financial relationship between the two parties is that the school charges for attendance and the bill is paid in full, without the assistance of the school or another party that the school is working with (i.e., government grants and loans). Maybe there’s a compelling reason that a school should know about every outside scholarship received by every student, but I haven’t heard that reason yet.

U of M and MSU both have the same policy. All scholarships reported regardless of aid status or application.

Aren’t scholarships above tuition & fees taxable?

Umich:

http://finaid.umich.edu/about-scholarships/submitting-scholarship-checks/

I know MSU does too but I’m not finding it immediately and I’m too tired to search more.

There are scholarships that are taxable, but it is not the university’s obligation to make sure they are reported on the 1098-T.