I recently found out that I won multiple needs based scholarships which actually exceeds my student contribution and federal work study. I also don’t have to take out any loans. When I contacted my college, they said that scholarships don’t change parent contribution and that if it exceeds work study and my student contribution, it might affect my grant.
What does this actually mean? Does this mean my student contribution is actually higher or is the college going to take a way money from me, so I actually have to take out loans? This basically means the scholarships were kind of pointless right?
If your school told you that outside scholarships do not reduce the parent contribution, then they don’t reduce parent contribution.
If these are one-time scholarships and would only reduce/offset your Fall 2015 school grants, you can try asking the outside scholarship provider to delay giving you the money until January 2016 (or even Fall 2016).
(Also keep in mind that you may owe 2015 income tax if grants/scholarships received in 2015 for non-tuition/books COA, plus any other income, exceed a threshold. See IRS Publication 970).
Thanks Madison 85, I may have to ask some companies to delay giving me the money until next year because the scholarships otherwise would be pointless.
^Yes. Could be fine to explain to outside scholarship provider (s) that you want to move it to the next calendar year (since you want to save on taxes, received graduation gift money, have some savings, etc.).
Are you saying your school is giving you a need grant also? The your school will reduce your loan and student contribution first, then their grant. Colleges almost always reduce their grant if you bring in outside money as your ‘need’ is reduced.
NEED based financial aid is provided because the school sees that you NEED the money. When you received the outside scholarships, suddenly you had money available to help pay the bill for YOUR education, so the school became aware that you no longer NEED as much help.
The scholarships were not pointless. You have the pride of being rewarded with them. They help you pay for YOUR education without relying on as much aid, which should also give you some sense of pride and accomplishment. You should be grateful for them.
You should also be grateful for the need based aid from your school, even though you are not receiving as much as you did before. This aid is a GIFT and not an ENTITLEMENT. MERIT scholarships are earned; need based comes from the generosity of the school.
Federal loans are not a curse; they are a fact of life for many people. Again, you are not entitled to a free education. It is not unreasonable to ask you to pay for part of your own education.
For what it is worth, my daughter was awarded an upperclassman scholarship for her junior year of college. She was invited to the award dinner and thanked the sponsor of that award for making it available. She did not receive a single penny from that scholarship fund- because she was working as an RA that year and already had very generous financial aid (including the maximum federal loan) she was not entitled to receive the cash award. It was still a great honor for her, and she was grateful for the recognition.
Be very glad that you are receiving an affordable education instead of becoming bitter.
Or look at it this way: if you got to add all of those scholarships to the amount you already have received from the school, you would have to pay taxes on the excess! Then again, it sounds like you may already have to budget taxes on what is provided over and above tuition and other allowable expenses (room and board costs are not allowable expenses).