How Will Private Scholarships Affect Financial Aid?
So you’ve secured an outside scholarship? Now what? Do you need to report it to the college?
Outside scholarship recipients are required to report the amount of their scholarships to the college’s financial aid office. Each and every college has what is referred to as an outside scholarship policy. This policy stipulates what will happen to your need-based financial aid package should you secure an outside scholarship. The college’s policy will state how any outside scholarships will (or will not) reduce a student’s financial aid award.
So why is this important? Well, you want to be sure that the extra money you’re getting really is extra money. To avoid any confusion or surprises, it is important to check with the financial aid office at your college to determine if receiving outside scholarships will affect your financial aid award, as stated policies do vary from college to college. Colleges must adhere to federal rules that govern the awarding of federal financial aid, preventing students from being over-awarded. In other words, students may not receive more financial aid than they are eligible for, based on the federal eligibility formula. Colleges must follow strict federal guidelines when allowing for outside scholarship monies.
On a positive note, most colleges have favorable policies that both adhere to federal rules as well as look out for the best interests of the student and their family. For example, if a student was awarded financial aid up to their full need, typically the financial aid office will adjust the self-help portion (student loans and work) of the student’s financial aid award. This can be very beneficial for the student, as it is a smart way of controlling loan borrowing levels. Outside scholarships can also assist a family in filling any gap in the financial aid package.
Students should be sure to check with the financial aid office regarding their college-specific policy on outside scholarship adjustments, as well as the process for notifying the college of any awards.