<p>Though I won’t hear from many schools or private scholarships until April, I anticipate a problem I’ve heard rumors about.</p>
<p>My understanding is that school aid packages are broken down into several categories:</p>
<li> Student contribution (loans, work study, savings)</li>
<li> Parent contribution (however much they decide you can afford to pay)</li>
<li> Grant aid (whatever is left after 1 and 2 to meet costs [‘demonstrated need’])</li>
</ol>
<p>Now, I’ve heard that third-party scholarships can be applied to category 1 up to the full amount, whatever it is. This could eliminate the student contribution completely. However, what happens to any scholarship amounts you win on top of that?</p>
<p>I’ve heard anecdotally that any additional scholarships just reduce the grant aid from the college. This really seems like a shame, that there comes a point where winning a scholarship gets you no financial benefit.</p>
<p>Does anyone know if this is the case, or if the reduction is prorated between parent contribution and the grant aid? Or, ideally, if scholarships can be applied to parental contributions?</p>
<p>When I received a scholarship from the university, the money was removed from the University grant (which sounds confusing, but for all intents and purposes, the scholarship was an 'outside' donation). When I received my Cal Grant info (which was after my fin aid was posted), it was ALL taken from the university grant.</p>
<p>So, for the most part, yes. It gets taken out of grant aid. </p>
<p>It is very difficult to get most scholarship/grant monies applied against student and parent contributions. In fact, it's almost impossible to get them against parent contributions (except those state loans) because they subtract that number from the amount of money they think you need in order to attend (I'm talking about the EFC).</p>
<p>... If that doesn't make any sense, forgive me and lemme know. X_x (And, of course, this is only my experience.)</p>
<p>I agree with Northstarmom. I think every college that my son applied to has a different policy regarding outside scholarships! But I figure that if my son gets say, $2000 of outside money, that will be $2000 less of loans/work-study he has to take (again depending on school's policy). Every little bit helps.</p>
<p>Policies differ per college although, unfortunately, at the majority, they will decrease need-based grant aid first dollar for dollar in relation to the outside scholarship. Minority have various different rules: some do not change need-based aid at all unless scholarship plus need-based aid exceeds total estimated cost of college and even then they decrease loans before going to grants; others just apply the scholarship to decrease loans first; others decreas loans and grants equally.</p>
<p>There are many different ways colleges apply outside awards. Some let you keep them. Some let you keep up to a dollar amount before reducing aid. Some reduce immediately. Some reduce on a share basis (50/50, for example). Some apply the grants directly to financial aid grants, some to loans and work study first. So you have to check with the colleges where you applied, each and every one to get the policies for them individually because they can vary widely.</p>