Why Would Anyone Apply For Scholarship With These Conditions?

Paying for College
1

<p>Here are two aid policies on outside scholarships from two colleges I was admitted to:</p>

<h1>The first $500 you receive in outside awards will reduce your need-based student loans and/or Federal Work Study funds.</h1>

<h1>One-half of the remaining amount from your outside awards will reduce need-based Harvey Mudd Scholarship</h1>

<h1>The other half will further reduce need-based student loans and/or Federal Work-Study funds.</h1>

<h1>Once need-based student loans and Federal Work Study amounts have been completely eliminated, any additional outside scholarships will reduce need-based Harvey Mudd Scholarship only.</h1>

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<p>The University acknowledges the achievement of winners of merit-based outside scholarships by reducing self-help (loans or employment) dollar for dollar. Normally loans are decreased first (Perkins, then Stafford), but at the student's request, Federal Work-Study may be reduced first. Awards not based on merit (such as employer tuition benefits) will reduce self-help only by the first $500. All amounts over $500 reduce Wesleyan gift-aid. State grants will reduce Wesleyan gift-aid dollar for dollar.</p>

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<p>Now, if earning outside scholarships only reduces the loans and work-study portion of aid by a certain amount, with the rest being taken from grant money, why would anyone apply for a scholarship? I'm not talking about giant scholarships that pay for your entire education, such as Questbridge, but small scholarships, like $500-$1000. If you accumulate those, it's going to end up taking away aid that you wouldn't have to pay back anyway. So what's the point of applying for scholarships?</p>

<p>I understand that if you were to accumulate enough scholarships to pay for everything that would be awesome, but the majority of scholarships offer around $1000, and it would be really hard to earn 50 of those or so to get to $50,000.</p>

2

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Well a scholarship is better that a loan. You will eventually have to pay the loan back. And it is better that WS cause it frees your time up. (and you can always get a non WS job with the time.

</h1>

<p>If you had $2000 and the first $500 reduced loans. Then the remaining $1500 reduces half loans - $750 and half grant. In total your loans are reduced by $1250. Why wouldn’t that be a good thing? I don’t understand.</p>

3

<p>Basically the schools don’t want to take away your motivation to seek outside scholarships. At the same time, they want those scholarships to reduce their own need-based aid. So they devise algorithms that accomplish both. The local Moose Lodge may not be too happy to know that the $1000 scholarship they award only ends up benefiting the student by $500 or $750. But the schools are the last payer and they determine the ground rules. A better way for the Moose Lodge to hand out $1000 is to provide a $1000 interest-deferred loan that is forgiven upon graduation.</p>