<p>Please, help a newbie member mom with a stupid question. I have read that colleges just deduct the amount of outside scholarships from the aid they grant you, effectively asking you to pay the same EFC no matter what. So, why bother going through the time and effort to win outside scholarships? Unless your kid can win really big bucks, is it worth it? Does winning even a small scholarship increase your child's admissions chances? Does a little extra outside scholarship money give your child an edge in getting the institutional gift money if your child otherwise qualifies? Is it better just to focus on the strategy of finding the institutional money? Please enlighten me!</p>
<p>Well, there are many (tons of) schools that gap (don't meet 100% of need) so outside scholarships would help to fill that gap in aid. Also, even if a school does meet full need, some may be in the form of loans and work-study. A scholarship would replace those first.</p>
<p>We considered ourselves borderline as far as whether we'd receive need based FA. So, our strategy was to apply to schools that paid 100% of need (reaches) and schools that had large (at least half tuition) institutional scholarships for which my D seemed to be competitive (matches and safeties). She also applied for a couple of outside scholarships (NMS and Byrd) that gave more than the typical 1k or less for 1 year. Like the poster above, we figured that if she ended up at a need only school, the outside scholarship might replace some loans, or if we didn't qualify for FA at all (which we didn't at some of the schools), it would help us to finance her education.</p>
<p>In the end she got a full ride institutional scholarship and the outside scholarship money came back to her to pay for living expenses, travel, etc. for freshman year. She is now transferring as a sop to a need only school and the outside scholarship money replaces some of her self-help (work study) and summer earnings expectation.</p>
<p>I am very convinced that if you are trying to finance a large portion of your child's education, then the bulk of the effort should be to research and apply to schools with merit aid where the student is in (more or less) the top 5% of the applicants (or otherwise qualifies for a scholarship). If you are low income, there are some large scholarships (Gates, etc.), but of course they are extremely competitive. While local scholarships are the easier to win, they are usually for small amounts and only for the first year of college, plus there are relatively few scholarships for later years. It is definitely something that takes careful consideration, as all scholarships require essays, most of which are not "one size fits all", so it can be a lot of extra effort for the student.</p>
<p>As far as having outside scholarships helping to get institutional scholarships, it would help somewhat as would other types of awards. However, it also depends on the timing, many outside scholarships are awarded after admissions decisions have already been made.</p>
<p>Agree with the other posters. You really do not know which colleges will accept you and how much they are going to give you in FA/merit money. Getting outside money can give you more flexibility. You also do not know how much in loans you will be offered in FA. For colleges that allow you to replace work study and loans with outside scholarships, those monies will be valuable to you. Also if a school that you really want is low in its offering and you really want to go there and have the outside money to go there, you can discuss merit opportunities for future years if you choose to go there. It can give you leverage and make you more desirable in that way.</p>
<p>To add on to the previous post: since you don't know which colleges you will be accepted to and colleges differ in their treatment of outside scholarships, you can't know if the scholarships might actually reduce the EFC, never mind the work study or summer earnings.</p>
<p>We have experienced both a school that knocks the outside scholarship off the EFC and one that limits the benefit to either the work study or the summer earnings component.</p>
<p>Or your institutional EFC might not be what you want it to be. Outside awards are more negotiable with the colleges than trying to squeeze them for more funds. It gives you more bargaining power. Admittedly there are scenarios where it can end up that you do not need those outside awards since they end up coming right off of your scholarships. You just don't now at the onset how you are going to end up.</p>
<p>My son was able to use outside scholarships to replace his self-help portion and even beyond that. The school increased the COA to include the cost of his computer (after we submitted receipts) and he was allowed to use scholarship money to cover that also. </p>
<p>My DD received additional (new) scholarships in her 3rd and 4th years and these were in addition to the original merit scholarship and institutional grants she was receiving. Her school gapped so they didn't replace any of the school funds.</p>
<p>D's outside scholarships were applied to her loans. Didn't help with our EFC but will help her with the total she needs to take out in loans.</p>
<p>My brother went to a presentation by a supposed "professional" who explained the college admission/financial aid process. She told the audience that outside scholarships will just reduce institutional financial aid. I told my brother she is misleading a lot of folks ... MOST people are not negatively affected by outside scholarships. </p>
<p>If institutional need based aid is reduced due to outside scholarships, it makes sense to me. More money = less need. If a merit scholarship were reduced, that would seem unfair (unless it's merit that is linked to need).</p>
<p>Thanks to all for your sage advice. Like Entomom, we will probably not qualify for much need based aid, and our EFC may be more than we can handle. I think we will mostly target schools that DD has a fair shot at getting merit $$ from since loans just don't make sense to us (we are fairly close to retirement without a lot of retirement savings). But, it seems that you all have found that it is useful to find some outside merit $$ just in case ... Thanks for the tips! Just what I needed.</p>
<p>It would be your daughter paying back the loans, since it's for her schooling.</p>
<p>Chuy, families with very high EFCs often have to borrow to pay the EFC. I believe that is what the OP refers to.</p>
<p>Oh, I thought she was referring to having to cover ALL loans herself.</p>
<p>I guess we're not keen on either DD or us having to pay back loans. Either way, there is a debt burden that might negatively affect future options in life. We'd like to avoid debt as much as possible. I'm not naive to the reality of how much higher education costs these days, but I'm not wanting to march into this process with the mindset that debt is inevitable. So if I understand this correctly, outside scholarships may be an important part of the equation of minimising potential debt. For us that's an important consideration.</p>
<p>^ Ms Ladybug,
I think we're in much the same boat as you. As I run the on-line financial aid calculators, we come out with little or no "need," i.e., EFC = COA or something very close to it. But W & I married (& had children) late in life, consequently we're far closer to retirement age than many parents of college-age kids. We also worked mostly at low-paying public interest jobs for several decades before seeing our incomes rise dramatically in the last few years, consequently we have relatively modest savings, including retirement savings, relative to our current income. We're scrambling to catch up, but the college cash crunch looms: D1 is a rising HS junior, D2 is 3 years behind. I'll be 65 by the time D2 finishes college. YIKES!</p>
<p>D1 is attracted to a lot of high-end need-only FA schools, but it's hard to see how we swing this without taking on very substantial debt (i.e., non-subsidized loans, since we likely won't qualify for much in the way of need-based grants or loans). Second-tier schools with fat merit aid packages are looking more and more attractive, as are publics. But outside scholarships are a great idea, too. We'll be beating the bushes for them in the next two years.</p>
<p>That, or figure out a way to boost our income by another $50K a year, since our EFC would still be the same (=COA) but we'd actually have the extra cash to pay for it.</p>
<p>We have no mortgage, car loans or credit card debt. We are also average income so when our daughter wanted to apply to certain colleges, we knew loans for her were a real possibility. As it was, she qualified for Perkins as well as subsidized Staffords. If the difference between attending school for free here (which she definitely did not want to do and I don't blame her for wanting to go somewhere else than where she had spent her entire life) or elsewhere that involved loans, the loans did not look like such a bad thing. As it is, she has been able to win outside scholarships that have drastically reduced her loans and for everyone in our family it has been a win win situation. I personally do not consider loans on par with the plague (avoid at all costs) ;)</p>
<p>"I personally do not consider loans on par with the plague (avoid at all costs)"</p>
<p>I agree - credit cards and car loans are the plague, avoid these instead, and invest in an education! (Four more years to mortgage-free and can't wait!) I may be ridiculously analytical but when my daughter was torn between pharmacy and another PhD-required career, I did a quick ROI calculation to make sure it was "worth" it (and she could afford the projected loans and still live independently as a twenty-something) and it was an eye opener! Not the deciding factor, but heavily weighted (I think) in her decision.</p>
<p>Loans, credit cards, any of these things can be helpful. Any of them can become a plague when misused, misunderstood, overused. There is nothing wrong with borrowing a lot of money for college. I would not give a set figure as to when t is not worth it. THe problem comes when people do not understand the implications of what they borrow and the discipline and sacrifices needed to repay the money.</p>
<p>Loans are not a problem in principle, but if you'll be 65 when your last kid finishes college (as I will be), the reality is any loans taken by the parents will be repaid out of retirement funds---maybe not the retirement accounts directly, as I expect I'll need to work at least until 70, but it will come out of funds that otherwise would go towards retirement. Bad timing, perhaps, on when to marry & have kids, and when to see our income peak just at the level that takes us out of need-based financial aid. But as best I can tell, we're really going to take it in the shorts on college costs. Oh, well. We started poor and will end poor, but at least our kids will get a decent education out of it.</p>
<p>When i mentioned I thought loans were an ok way to go, I meant student loans, and only subsidized ones. Definitely not parent loans. If those were needed, D would have definitely had to search out other schools.</p>