<p>So recently I've been getting scholarships that are supposed to go towards college expenses, obviously. The money is given to us in the form of checks and we're supposed to deposit/cash them. I've gotten over $5k so far and I've spent it on a new laptop, new clothes that I need for college as well as a few other miscellaneous things (some I feel were unnecessary and I feel bad). However, I have also been using the money to help around my house, such as buying food and whatnot because I am in a low-income family and money is extremely tight for us. Should I feel bad for using my scholarship money to help out around my house in the aforementioned way? I feel like if the scholarship people knew, they wouldn't be upset but since it isn't directly used for college, they would be a bit disappointed. I think the part that bothers me the most is that I have to take out over $20k in loans and I haven't completely responsibly used the money for college and I freak out every now and then because student debt scares me. I was given a shot by scholarship donors and I feel as if I am not responsibly spending the money. I plan to work over the summer to replenish the funds I've spent and hopefully that'll make me feel a bit better. Can anyone give me any advice to make me feel better or make sense of what I've done? I have such a guilty conscience it's not even funny. HELP!</p>
<p>I don’t think this will make you feel “better,” but be aware that you must report your $5,000 in scholarship money to your college. Scholarships are considered a resource in financial aid calculations. If you are receiving need-based aid, your aid will likely be adjusted as a result of your scholarships. The most favorable application of scholarship funds is to reduce your self-help portion which may include Federal Stafford and/or Perkins loans, Federal work/study and in some cases a summer earnings expectation. In other cases, the college or university’s need-based grant is reduced in response to outside scholarships. When you report your scholarship amounts to your financial aid office, ask that they be applied to self-help.</p>
<p>Good luck.</p>
<p>Also, those scholarships may be taxable if you spent them on non-qualified educational expenses.</p>
<p>It is not illegal, but it is not smart. You need to meet with a financial person and draw up a budget. You have a pocket full of money and you don’t know how fast you’ll spend that money if you don’t have a plan and a budget. </p>
<p>You will have to account for this money come tax time.</p>
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<p>Are you talking about 20k this year or 20k over the cost of 4 years?</p>
<p>If it is 20k over the cost of 4 years, that 5k in scholarship $4 could have reduced your overall debt to 15k in stead of 20k. The money could have reduced your self help aid, leaving you money for books, and perhaps the lap top. </p>
<p>If it is 20k a year, you could have used the 5k to close the gap in your financial aid package (as it sounds like you chose a school that does not meet 100% demonstrated need). In addition, if the debt is 20k a year, you will not be able to borrow this without a co-signer.</p>
<p>This is a worrisome situation. Your money is to be used for direct school expenses–it is not allowed to be used for household expenses. You were not given funds for any other reason than college. Often a laptop is allowed but you should be coordinating use of these funds with the school and making sure they are all really available to you after tuition, fees, room and board are paid. You will need some level of funds for expenses during the year and books. Most students on aid cannot afford a bunch of new clothes and need to live very frugally, I know because that’s what my daughter had to do. She bought a refurbished computer from Dell outlet store online with a guarantee for cheap. It isn’t so much about feeling bad as worry about consequences and how to be responsible for your budget so you can get through school at all and especially not fall into a pit of debt so you can get out of the poverty cycle. Loans are not free money, Take back whatever clothes you haven’t worn or anything else you can return. Save the money for the fall. Spend it after your fall expenses are taken care of. Try to find someone who can help you with this. </p>
<p>I thought most scholarships weren’t given to the student to cash, but rather sent to the college for the student’s account. </p>
<p>Yes, and the opening post provides an example as to why scholarships are often sent to the school. In many cases it is good to get some smaller scholarships as a check paid to the student so they can use it to pay commitment deposits, orientation fees, buy books in advance, or even to purchase a computer for college use (be sure to ask for a one-time increase in cost of attendance when purchasing a computer for school use, btw). Unfortunately many find out too late - after they have spent the college money on a new wardrobe, for example - that the scholarships will be considered part of their financial aid and will be expected to be used toward college costs, subject to taxes, etc. BrownParent has a good idea to return whatever can be returned.</p>
<p>There are some small and local scholarships that sent directly to the recipient and the recipient need to report that to the school.</p>
<p>I would say it would depend, I would think a laptop would be a apart of school supplies, since computers are a big need now and days to do your course work, as far as food, clothes, and a roof over your head goes those are a need, as long as you didn’t go overboard with frivolous spending I would say it is okay unless they say you can absolutely not do it. But you may want to talk to your financial advisor to get an overview of what the rules are for scholarships.</p>
<p>@RaleighGirl that is not good advice. You don’t know if those funds are meant to be used for tuition or other fixed costs so she can enroll this fall. It is not clear that this is extra money. Students have to use grants for covering college expenses before buying extras. If she is spending tuition money she may not be going to college this fall.</p>
<p>There is only a certain amount of money allocated for ‘books and supplies’ and it won’t cover an extra laptop in any one year. There has to be a request for an extra allocation. Otherwise you have to come up with that separately or by saving your extra allocation over more than one year. Don’t confuse people if you aren’t familiar with it.</p>
<p>Thanks all! I don’t think I mentioned that I will be flat broke in college. I will have various family members helping me out and sending me money. Do you think it is a good idea for me to work this summer to replenish as much of the funds as possible? I foolishly spent a good chunk of the money and now I will have to put it back. I also got $1,000+ in more scholarship money that I have promised myself I won’t waste and will only use for school-related expenses.</p>
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Yes!</p>
<p>Okay thank you!</p>
<p>And also, when it comes to the food, my family is very poor. We are on federal assistance and at times we don’t even have food in the house to make a meal out of so I thought using the money for that wouldn’t be such a bad idea. Was I wrong? Should I really still be selfish in that sense?</p>
<p>It’s not a matter of being “selfish,” but a matter of using other people’s money (the scholarship grantor’s) for it’s intended purpose. Heartless as it sounds to say you should be sitting on funds while your family goes hungry, the scholarship committee didn’t select your as it’s recipient, over other applicants, and then have you spend the money on other things before school started. </p>
<p>Um…yes, you should work this summer. You should have been working this summer to ADD to your outside scholarship money, not to replace it.</p>
<p>As noted, any money spent on unqualified expenses is considered taxable income. </p>
<p>Stop spending college money on other things. You need to report that money to your college anyway…as received. So why not just send it directly to your bursar’s account at your college, rather than keeping it and spending it.</p>
<p>You should also plan to work 10 hours or so a week during college so you will have some spending money.</p>
<p>First of all you need to check your college’s policies for scholarship money. If your college finds out about these awards and you did not report them if they so require, it is possible that you lose financial aid. In some cases federal aid may be involved and it can be a problem, a big one. Be aware that any grants that exceed tuition, fees, expenses also have to be reported for tax purposes. Where you stand with fin aid and the rules, we can’t tell for sure. Send what’s left of your money to the bursar’s office at the school, and you may be able to adjust your loans amounts. Do not get into a cycle of borrow and spend. You can end up in worse shape after college if you do this, and it will hurt your family even more. </p>
<p>Yes, if you have need, you should be working. My kids all worked every summer as soon as they could in high school to have some college money. </p>
<p>Whether you fall afoul of financial aid rules and policies or not, if you are high need, you will need that money for a lot of things in college. You need to get there, buy books and print outs, supplies, etc. To spend it before you even know what the score is at school is extremely short sighted. You should also be reducing loan amounts as much as possible. </p>
<p>What if the money I am giving my mom for household things is going to be paid back? Would that make it fine then since technically there is no loss? And what should I hold on to the scholarship money for? For miscellaneous college expenses I would not be able to afford otherwise or should I spend it all on tuition and be broke when I get to college?</p>
<p>How would your mom be able to pay back the money if she has no extra money each month?</p>
<p>the money first goes to tuition.</p>
<p>your summer earnings should be saved so you wont be broke when you get to college.</p>