My husband and I were looking to set up a local scholarship through our business for first generation kids heading to college. Many businesses and families in our communities do this, and Scholarship Night at our local high school is a big deal, with kids proudly marching across the stage to receive their scholarships. For the most part, these scholarships go to kids who have financial need, and those who don’t, no matter how deserving, usually don’t get anything. When my son received a scholarship, we realized that he wouldn’t really get the money. Instead, we reported it to his college, and they took that amount off the grant aid they were offering him. So in all reality, his scholarship helped the college, not my son. Right? In all honesty, we didn’t care, and by the end of senior year of high school, our son was tired of the constant competitive atmosphere in our school district, which starts in about 3rd grade, and he chose not to attend Scholarship Night (or valedictorian night for that matter.) We actually tried to transfer the scholarship to someone who could use it, like maybe a community college student? But our district scholarship coordinator said that that would be a slap in the face to the family who chose our son for the award, and she had a point there. I looked into what schools apply outside scholarships against financial aid, and realized they all do, by federal law, although a few apply it against loans, which is a true help to students, as opposed to applying it against grants, which benefits the college only. So my questions are: Is this all just big scam? Do scholarship grantors know that the money they are generously giving is going mostly to colleges, not to students? Is there a better way for us to help first generation students financially than giving them a scholarship that will only benefit their college? Am I overthinking this? One of my friends is horrified that I’m not thrilled with the local scholarships in our area, but she is someone who likes to see her children recognized publicly, and this gives her another opportunity to do that. Although the $5K per year scholarship her son received, will just go to his Ivy League school, which I believe has plenty of money in their endowment to pay his grant aid.
You can check college web sites to see if they first apply outside scholarships to replace loans or expected student work earnings (or unmet need, if applicable).
Example:
https://financialaid.stanford.edu/aid/outside/
https://college.harvard.edu/financial-aid/types-aid/outside-awards
http://finaid.yale.edu/costs-affordability/types-aid/scholarships-and-grants#merit
https://www.princeton.edu/pr/aid/08/qa/
Some colleges do not say, so ask directly.
Anyone who is full pay is going to benefit from an outside scholarship. Most middle class students are not getting 100% of their way paid unless it is by merit scholarships as need based financial aid is for low income students only.
My daughters each receive $2000 awards from an organization and that money went to our COA even though both had some merit money from the schools.
Many low income students going to state colleges do not have their need fully met, so a scholarship you set up would benefit them. Even at Harvard and Yale, a student can keep some of an outside scholarship to pay for a computer or incidentals. I’ve seen numbers like $5-6k being allowed before the school’s grants are reduced.
Its very nice to see private scholarships set up for first gen kids. Economic inequality is one of the most pressing challenges of our time. If the school reduces the financial aid because of the outside scholarship, presumably the withheld amount would be going to other first gen kids who need it. In another word if the school shares the same mission OP can take comfort in knowing that the money is going toward the same cause.
I personally believe that low number of first gen kids in colleges especially at private ones have more to do with lack of information than college financial aid. Many of these parents don’t know they wouldn’t be paying sticker price of the tuition and don’t know how to help their kids build stats and ECs needed to be competitive in college admissions. As such I think resources going toward offering vouchers for college counseling and test prep would probably be more effective in helping these kids gain admission which would usually come with financial aid.
I understand fully what you are saying and it’s the reason my D ended up only to applying to 1 outside scholarship. You could make the scholarship available for specific local schools like a CC or somewhere else that doesn’t have aid.
I was very surprised about this when my D was a freshman two years ago and only discovered how it works after she had put a lot effort into applying for scholarships. One scholarship even sent a letter to her college saying that if the money was just going to be subtracted off her existing aid from the school they would award it to someone else. Luckily, her college does not have the policy of the scholarship lowering aid from the school.
Harvard and Yale, like other good-financial-aid schools, expect a student work contribution. As the links from #1 indicate, they use outside scholarships to first replace the expected student work contribution.
It actually makes sense from the scholarship giver’s point of view to award only up to the amount that the student can receive without losing other grants or scholarships.
You might think about creating a scholarship that can be used at a nearby school that does not meet full financial need. Your local CC or directional U that may not have much more to offer than Pell grants and loans, maybe?
But that still helps the student/family. It’s $2000 or $4000 directly into the student’s pocket, and that’s what the OP is trying to do, put money into a student’s pocket.
Did I write otherwise? Obviously, replacing student work expectation or student loan with scholarship is a gain for the student and/or family, unlike replacing grant that results in net of nothing for the student and/or family.
@2dogs2kids You raise a lot of good points.
Is there a way to structure the 'scholarship ’ so it goes towards incidentals like books, computer, dorm stuff, travel costs etc?
Perhaps write the scholarship amount as “$X, or the amount that the student can receive in outside scholarships without reducing other scholarship or grant aid at his/her college, whichever is less”.
- Thank you for considering doing that.
- At some point many of us come to realize this outside scholarship Catch-22
- It may be anathema to many College Confidential-ers, and may also make no sense depending upon your type of business (and your goals) … but have you considered instead of a traditional college scholarship, creating a trade school scholarship? I’ll spare the soap box, but a modest scholarship might have significant impact on a trades education that isn’t seen in the world of running EFCs through $75K COAs mitigated by endowments and subsidies.
The more specific you make it (‘for travel’ ‘for dorm supplies’) the harder it will be to administer or for the student to report it to the school. Taxes become an issue as if it is for travel, it will be taxable and not able to offset tuition. Do you think a school wants to do the account to return $500 to the scholarship committee but keep $1000?
You can’t control everything. Sometimes you just have to trust that a scholarship will be used for the best purpose and that sometimes a student has so much in scholarships that additional money doesn’t help. Those situations are really really rare. Most students can use an extra scholarship and is proud to win one and have it presented at award night.
Kids in my area who are first gen and cannot get into one of the big time “meets full needs” colleges are insanely grateful for every last $20. If they are living at home (most of them) and commuting to either community college or the local non-flagship state U, they are STILL in debt up to their eyeballs by the time they graduate with a BA. The idea that your $2500 or $1200 means less in loans for them (if the college’s policy is to replace loans with your grant) is heaven for a low income kid who is already working a job or two in addition to their course load.
You are worried about the middle class and upper middle class kid for whom the scholarship is a “nice to have”. Focus on the kids who are doing college on such a shoe string that less in loans is a very meaningful award.
For me, the outside scholarship is a real benefit for the kids, for example, if the kid have full ride from university (30.000 dollars per year}, and receipt 10.000 from outside schollarship, the University take 10.000 from de inicial proposal for kid 1 (this kid is cover) and use this money to complete the scholarship for another kid.
The universities or College money come for donors, and they normally give for a exact proposit, sometimes for scholarships, sometimes for construction, etc, but the money colect for scholarships, just can be used for scholarships not for build a cafeteria.At the end of the day, off corse this is a better good will, and stadistics for the University or College, because give more scholarships in his name, kid 1 and kid 2.
Sorry for my english.
My S went to Bowdoin and received a couple of nice outside scholarships. They didn’t reduce his need-based grants.
There are many scholarships that require applicants to submit the financial aid award from their college proving that they have unmet need, so that is probably the easiest way to address your concern.
Having financial aid reduced really isn’t as common as you might think though since the vast majority of colleges throughout the country gap, and even those that meet full need expect a student contribution, work study, and often a student loan. Most colleges will eliminate those contributions before reducing FA.
My kids aren’t first generation and our income is borderline Pell eligible, but we’d still be thrilled if someone awarded one of our kids $1200. Most kids aren’t attending residential colleges, so I don’t think it’s a given that the student would have their aid reduced. If the award is never given or comes with lots of strings, the student won’t receive any benefit. If you award the scholarship, at least there’s a chance that it might help them.
Colleges that do reduce aid because of outside scholarships aren’t taking your money, they’re taking back their own. Families are expected to pay their EFC, so if someone else contributes then the college can use its money for someone else. We had a thread once by a parent whose income qualified their kid for a ~$30k need based grant but whose parents were gifting her something like $50k/year. She didn’t want to report the financial support because she didn’t want to lose the grant and have to pay it herself. If colleges ignore outside aid so a student can keep the $1200 gift, it seems like they’d have to ignore the $50,000 gift too. But if the income cap for need based aid is $100k and they let a family whose total is $150k slide, shouldn’t they also have to award the $30k grant to other families whose income is $150k? If people can exceed the cap and still get aid, I don’t really see the point in having a cap.