scholarships question...i'm confused

<p>So I went on the Penn Financial Aid website and it said this:</p>

<p>"Outside Scholarship Policy for Aided Students
When you receive an outside scholarship (i.e., scholarships awarded from non-governmental sources outside the University), you will receive a dollar for dollar reduction in the self-help component of your financial aid package. Self-help includes expected savings from summer earnings, and work-study. University grant will be reduced only after all self-help has been eliminated"</p>

<p>What exactly does this mean?
To me, it sounds like any scholarships you get are factored in and reduce the aid you get directly from Penn. Penn aid is supposedly all grants, so you don't have to pay it back. What would be the point of applying for outside scholarships if Penn is going to take their money away if you win those scholarships? Then, any scholarship money you won would be pointless because it would just be replacing Penn money that you wouldn't have had to pay back anyway.
It also sounds like it could mean that getting too many scholarships (which, as far as I know, are supposed to help cover costs you can't afford EVEN AFTER work study and such) would reduce your chances of getting work study. That would also make the scholarship money pointless.
I hope I'm misunderstanding, because this really is making no sense to me. Would someone please explain?</p>

<p>Self help is what you are expected to contribute (like EFC). So if your contribution is $10K and you get a $2K private scholarship that is included toward the $10K.</p>