<p>Hi I am a high school Senior and the high school I attend has a great scholarship program for its graduates. Every time our principle talks about our school's scholarship program, he always tells a story about how they used to send the money to the school its graduates were attending but they found that as a result the college would cut the aid money to the students. Now the high school sends money directly to the student and we are told that we should not inform the college we are attending about the money we are getting from the high school. Being that I'm going to college next year and I'm not fully sure how all the scholarship stuff works, I'm just wondering if this is a bad thing, can I get in any trouble for doing this?</p>
<p>Look up the word “fraud.”</p>
<p>If the college you end up attending asks if you’ve received outside scholarships, and you say “no,” and the college then gives you a financial aid award based on the false information you gave them, that’s fraud. It’s a crime.</p>
<p>Whether or not you get caught, it seems like a bad way to start your adult life, don’t you think?</p>
<p>By the way, you misspelled “principal.” “Principles” are something else . . . and, from the sounds of it, they’re something your principal does not have!</p>
<p>^What dodgersmom said!</p>
<p>Unbelievable! A school principal openly encouraging young people to defraud their college.</p>
<p>While I understand the impulse once students realize that merit scholarships don’t end up being as helpful as one feels they should be because they often just reduce the overall amount of financial aid, two wrongs do not make a right.</p>
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<p>there is no right way to do something that you know is wrong.</p>
<p>Now it is up to you to pick your poison.</p>
<p>Willful misrepresentation could be ground for having your admissions rescinded (if you have not started school yet, being dismissed (once you are in school), not receiving any future need based aid, and having to repay all aid given to you.</p>
<p>Keep in mind that once you let the school know, some will let you keep the $ for the one time purchase of a computer. If there are any loans in your financial aid package, the scholarship can be used to reduce your loans or reduce your self help contribution.</p>
<p>This will eventually catch up with you because the people who gave you the scholarship will report it to the IRS. You will have to include it on the FAFSA when you file for aid next year and *you are caught[/]</p>
<p>Im also a HS Senior. I do not know what scholarships exactly you are dealing with, but from what I’ve heard, certain awards do not need to be reported. For example, I applied for help from a friend of a friend in another state who would just send me checks, not scholarships, just money to pay for college. As far as I can tell, money that you obtain that may be used for college doesn’t necessarily need to be reported as a scholarship.</p>
<p>Actually based on the situation as you described, you will have to report the money on the FAFSA next year.</p>
<p>If an organization, instead of awarding a “scholarship”, gives the money to the student as a gift that they do not necessarily require the student to use for college expenses, then how would the money be appropriately reported? I think in that case it would probably go on FAFSA and Profile under the question about “cash received or bills paid on your behalf”. It would still reduce the student’s need, and thus any need-based aid, but possibly in a way more advantageous to the student. </p>
<p>If the school is willing to give the money with no strings attached, it seems that that might be a way of doing it that would be more in line with their intentions. </p>
<p>Of course that may have different tax treatment for the donor as well (I don’t really know how that works).</p>
<p>(I was composing this when bgallo and sybbie posted – but it sounds like another instance of what I am asking about – when a student receives money to pay for college without it being a “scholarship” it would still be reportable as income, but “scholarships” have the harshest financial aid treatment possible, reducing aid dollar-for-dollar which no other income or asset does)</p>
<p>@sybbie719 Are you referring to my situation? I don’t actually have the FAFSA on file with my top choice colleges because I’ve found that my high EFC rarely helps me. Are there other implications I should be aware of?</p>
<p>bgallo, if you don’t receive any financial aid from your college, then there would also be no impact from reporting the funds as an outside scholarship.</p>
<p>other than to the IRS</p>
<p>It shouldn’t have any IRS impact either, unless it exceeds the cost of tuition and required books/supplies.</p>
<p>I am HOPING this principal is misguided. I wish I knew him so I could send an explanation of why what he is advocating is wrong, wrong, wrong.</p>
<p>@mathmomvt It will exceed the cost of attendance, but it’s my understanding that I can earn scholarships up to the government calculated cost to attend said university. I will report any scholarships I am required to though, just not money that isn’t technically scholarships.</p>
<p>Scholarships are taxable once they exceed the cost of tuition and books/supplies. Scholarships that go toward room and board or personal expenses must be declared on your taxes. I’m not sure what the tax implications are if someone gives you money that isn’t technically a scholarship.</p>
<p>@mathmomvt Thanks for your help! I’ll just ask my admissions counselor to make certain I’m within the law.</p>
<p>You need to ask an accountant, not an admissions counselor. Admissions counselors often are not tuned into the nuances of financial aid, and they certainly are not tax experts.</p>
<p>I don’t know how much this scholarship is, but maybe the school needs to change the name and not call it a scholarship. If they just called it an award for high school achievement (but not a college scholarship), then it probably only would count as income.</p>
<p>Or the school could just give the student an item…like a laptop, iPad, or even a big gift certificate to some store. Then the school/child may not be breaking any rules. </p>
<p>If the school is determined to not have aid deducted, then there are legit ways to avoid any issues.</p>
<p>I missed this…</p>
<p>*If an organization, instead of awarding a “scholarship”, gives the money to the student as a gift that they do not necessarily require the student to use for college expenses, then how would the money be appropriately reported? *</p>
<p>yes! That is what I was thinking. It seems like it would just be income or a gift just as if grandma gave you a graduation gift check of - say $1000. That’s not a scholarship, but may be it’s income??? </p>
<p>How do you report a “gift”? And wouldn’t that go on the following year’s FAFSA (for soph year’s aid)???</p>
<p>Any “gifts” of money - including any money given not-as-a-scholarship -would be reportable on the next year’s FAFSA under student’s income from gifts. That is what you are supposed to do.</p>