My D is going to UMich and she received several outside scholarships (private and from the state). They first reduce the loan and work study amount when external scholarships came in. When there is no more loan or work study left, they reduce the grant from school. As she also got a large merit scholarship from school, there were not much loan and work study in her FA package originally. At the end, she gained nothing from one of the outside scholarships other than one line in her resume.
i think it is very generous of you to consider it.
my D just got a fantastic local at our night—instead of actual cash it was in the form of a complete (physical) laptop/printer/all the trimmings setup + a small check for ink. sounds like a small thing, but if you are specifically targeting first gens it can be a large unexpected expense and it might just thrill them to death. (and i gotta tell you, it really broke up a very long night of micro awards–the audience definitely needed something different half way through the evening).
if you were concerned about specs you could do it in the form of staples/best buy/amazon gift certs with say, a flash drive taped to the envelope.
personally, if i have to be honest, it was a useful “scholarship” and we are grateful to that donor!
I agree with those who are thinking outside the box. What about working with a particular college and creating a scholarship for Pell-eligible kids that does something specific?
The Georgetown Scholarship Program gives free bedding to its scholars. I know that sounds like not a big deal to those who can afford it to buy it and ship it, but it’s a huge relief to those on a shoestring. Perhaps a scholarship that buys the first semester of books for some number of kids. That kind of upfront expense is the kind that’s a killer for low-income families. Or a fund that provides $xxx to graduating college seniors for interview attire? Laptops for low-income kids?
My daughter’s financial aid package at Brown has several clear components, some of which can be replaced by external scholarships. She was permitted to “cover” her summer earnings contribution (about $2,700), her work study award (about $2700 - $2,900) and her loan ($3,000) and could also have gotten another $1,000 permitted for a computer. After that, any additional external scholarship money would have reduced her Brown scholarship (need-based aid). Note that this leaves the parental contribution fixed - it can NOT be reduced with external scholarship dollars. She ended up getting scholarships totaling something in the neighborhood of $5,000 (about $4,000 of that will be renewable) and this is VERY helpful for us. Interestingly, though, the renewable portion is itself reduced if she gets any OTHER scholarship money. So that scholarship agency’s policy is much the university’s financial aid policy! All very complicated.
OP, one way to avoid having the college take the scholarship is to pay it directly to the student rather than have it go through the college’s financial aid office. Here’s my story of my two older boys and how incredibly beneficial outside scholarships were to us, a moderate income family of 5 (at the time) earning between 78K (in 2011) and 67K (last year) over the past 5 years.
Both boys attended top schools with very generous need-based aid (MIT and UPenn).
Both boys had a $6000 a year Corporate National Merit Scholarship. Eldest was able to apply it all, and if effectively wiped out loan and work study for him. Middle son was able to apply $5950 (some Penn formula). With that scholarship alone, our costs were absolutely minimal (MIT cost under 10K total for four years, and Penn for the first semester was around $600 out of pocket)
Eldest had several other scholarships. He had a bowling scholarship of around $500 that could only be sent directly to MIT. He couldn’t use it for 3 years, but MIT changed their formula (as @profdad2021 said, complicated stuff!), and he was able to bring it into MIT during his senior year; thus, his senior year at MIT was ridiculously inexpensive. (And my son worked all four years full time in the summer and part time during the school year, and graduated debt free)
Eldest also had two other scholarships. One was a Chess Scholarship that was paid directly to him. He used that to buy a computer and probably saved the rest. He also won a flight scholarship that paid for two round trip flights.
Middle son had two other scholarships, all from Elks Foundation MVS. One for $600 was paid directly to him, and he bought a computer with that, as well. The other scholarship is for $1500, and it’s still on hold. We’ve deferred it, and will hope to defer it again until he might eventually use it. (He’s not returning to Penn)
Having said all that, I can tell you that if my eldest had gone to school here in California, he would have lost his $6000 scholarship because of the way the Cal Grant works with a student’s EFC.
Hope this helps.
Are you sure? UCSD says that scholarships are applied first to unmet need, work study, and student loan amounts before reducing grants: https://students.ucsd.edu/finances/financial-aid/types/scholarships/
It doesn’t really matter if the scholarship is paid to the school or to the student. Schools require the student who is getting FA to report outside scholarships to the FA office and adjustments are made to the package. Many schools do allow the outside scholarships to offset loans, work study, or student contribution.
The original question is who benefits? Almost all students do. There are very few who don’t and those are the students who are already getting COA covered by grants or scholarships or full ride athletes like basketball or football players.
I read the average outside college scholarship is $4000. Our D’s college reduces their need-based grant aid by the amount of outside scholarships. For us, unless the outside scholarship amount exceeds need-based grant aid, it’s really not worth the time and effort to apply for in most cases. Of course, if you’re fortunate to get a full ride scholarship or an academic merit award that actually reduces the net cost to the family, that’s a different story.
I am really glad this issue was raised. Clearly each school is different, but there are certainly cases where the outside scholarship does not really help the student in the end. Suggestions to provide a computer or other in-kind gift are good ones (not sure how that works on taxes or FAFSA- anyone?). And yes, even if a scholarship is paid directly to the student, it needs to be reported on the FAFSA and CS.
(Just want to say that not all first gen students are low income, and not all low income students are first gen!)
My kiddo has a serious genetic condition for which a lot of outside scholarships are available. These are typically named scholarship to honor a young person with the disorder who died. Most of the scholarships are presumed to help the individual student have more time for treatment compliance – in other words – to reduce the work burden on the student. However, even under these conditions we ran into issues with colleges that met full need. He had an option between two full-need colleges – one said for any outside scholarship he could have half the money up to $1000 and then about a quarter of the money after that, with a cap of about $2000. The rest would reduce the needs-based package. The other college said up to $7000 they would not use any of the funds to reduce need – instead it would reduce summer work income expectations. Guess which college we chose?
The key thing here is we asked each college to calculate exactly what our FA package would look like if he obtained outside scholarship money (and we anticipated several levels of funds he might receive). The calculations they used were very complicated, and not fully consistent with the policies listed on the respective websites.
Can you not word it as a scholarship? Maybe make it a prize? Perhaps give a gift card to Amazon or Best Buy (yes I know student is then locked in to buying from those companies) to buy a laptop. Or let them find the laptop they want and you gift them the money to purchase. And thank you for doing this.
One other thought I had, at my son’s private HS there was a dress code (khakis and polos). Not something you would think would be a hardship for most kids, but it is for some. The HS set up a fund to buy Target and Old Navy GCs to give to boys who cannot afford the clothes or only have one set. Perhaps instead of doing something for college there are kids at your local HS who could use some assistance now.
While you have to report outside scholarships, they can’t quantify certain scholarships such as the flight scholarship. That didn’t count against my son at all. Depending on the school, they don’t necessarily count outside scholarships given directly to the student, at least in our experience they didn’t.
@ucbalumnus, yes, it’s based on unmet need, but eventually, you get to the EFC, which is what they use to determine need, and they won’t let you bring in anymore scholarship above that. So if our EFC was 7K, anything below that would go to the school, whereas, at Penn and MIT, that was totally not the case. I am not explaining it well, but believe me, we went through a discussion, not at UCSD but at Harvey Mudd in 2012, and because of our EFC that year and our qualifying for a Cal Grant, the outside scholarship would have gone right into their pocket. I also did some conversing with f. aid at UCSD/UCI in 2015, and it was definitely true that a portion of the scholarship would go to the school. I’ve got lots of f. aid offers (I save documents because it’s very helpful in my job as a consultant) to compare, and it’s clear that the schools outside California that aren’t dealing with federal aid in the f. aid package can formulate aid much differently than those that do deal with government aid (such as Pell and Cal Grants).
Scholarships help the vast majority of students because most colleges don’t meet full need. I work in TRiO, at a college that cannot meet full need for all of our first gens. Every dime these students receive in outside $ is much appreciated.
My oldest received a small local scholarship. The organization handed the students a check at the organization’s award luncheon. We reported it, but it was all on us to do so. You see, someone in the organization had seen aid reduced for a past recipient and felt it was blatantly unfair, so it left it to the recipient. Awarding money directly to the recipient does create more potential for misuse of funds. Over the years, I’ve seen a few families that would have “needed” that money for something before the first tuition bill hit the mailbox.
It seems that for many students in my town, the small local, one-time scholarships go to the college who then reduces their grants, and do not apply it to the EFC. It has made me less willing to donate to some of the PTA and other local groups that give out scholarships. Most of the kids here are not Pell grant or first gen, but those with incomes that still allow some financial need. I can understand your concern OP. Not sure what the answer is, as the decision as to what the scholarship goes towards is up to the college.
I wonder whether you might be able to get around the problem by helping out your target population while they’re still in high school.
In my community, a man who strongly supported music education in the public schools recently died. His family, with the support of others, is raising money in his memory to support efforts to help promising music students while they are still in high school – by helping them pay for instrument rentals, private lessons, summer music camps, and the like.
Might there be something similar you could do for the students you want to help? Something that would help them while they’re still in high school?
Virginia Tech uses EFC as a limit for outside scholarships. After EFC is met by outside scholarships, grants and other aid get whittled away.
The outside scholarship giver can write the scholarship amount as “$X, or the amount that the student can receive in outside scholarships without having other grant and/or scholarship aid reduced, whichever is lower” and require the student to contact the college’s financial aid office to find out what the latter is and report back to the outside scholarship giver.
If more outside scholarships did something like this, then that could help put some pressure on colleges to apply outside scholarships first to unmet need, student loans, and expected student work earnings before reducing grants, since students with such outside scholarships may be financially influenced to choose colleges where their outside scholarships actually help them.
Could you set up a scholarship through the local university where the most students end up attending? That would allow you to set the specific terms of the scholarship with the school to help ensure that the funds directly benefit the awardee. For example, you could request that the school provide you with details for each applicant so that you know if the scholarship will be used to offset grants or loans in the FA package.
Sometimes it helps a student who is not having full need met. Also it could help reduce the loan part of a FA package.
Thanks everyone for your thoughtful replies. I feel like I can take some of the ideas you’ve given me, and go to the scholarship coordinator at our district and see what she thinks.
I like @Ucbalumnus’ idea of phrasing the scholarship in such a way that it will go to a student whose college allows it to go towards work-study or loans or other incidentals.
Also, @DavidPuddy’s suggestion of giving a scholarship for trade school is compelling, since my husband and I own a plumbing, electric, HVAC business and have a very hard time finding people trained in the those trades. I’m embarrassed to say that I don’t know much about trade schools, so I’ll look into that.
Awarding a student a laptop, flight coupons, or other more concrete gifts is also something to consider, but I’m thinking the value of those would probably also need to be declared to the school and would be subtracted from the financial aid awards. I’ll see what the scholarship coordinator says about it.
@Jzducol, and several others, suggested helping the first gen kids while they are still in high school, and this may be the route we go. My son is first gen, and the only reason he got into a school that met full need is because of the massive amount of research I did before he started high school. If I had not done that, I would never have known that if he worked hard in high school, the sky was the limit. Our large, public, rural high school offers pretty much zero college counseling. There is a financial aid night, but by the time parents attend that, it is too late to consider the rigorous qualifications needed for full need schools. One of my son’s friends, a bright and talented kid, didn’t even know until college app time, that he should have taken a foreign language. So maybe I will look into offering something to 8th grade graduates for private high school/college counseling. It’s possible that many first gen students don’t even make it to the scholarship application process, and we could focus our efforts there.
Of course, there is always offering help with books, laptop, etc… for community college students, and my heart is there too. My daughter, who has struggled with mental health issues, couldn’t go straight to a four-year college because she tested out of high school early, and community college has been a stellar fit for her.
I also want to say that I didn’t intend to demean the colleges that apply outside scholarship to grants. I’m so grateful to my son’s school for all the financial help they’ve given us, including increasing our grants when our daughter wanted to attend community college in another city. And I’m glad some of you reiterated to me that the money colleges save on one student, will go to help another.
So thank you all for giving me so much to think about!