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How Are Scholarships Calculated into Financial Aid?

frozenyyogurhtfrozenyyogurht Registered User Posts: 80 Junior Member
Helllo!

I wanted to preface this by saying that I haven't been applying to as many scholarships as I probably should be. But here's the thing, I've heard that scholarships often times will deduct from the financial aid a school gives. For example, you might get a little bit of financial aid, but after reporting a scholarship, they would deduct the amount they awarded you so you'll be left with even less financial aid from the school. That's why I'm wondering, is it even worth it to put in the effort if you're not *really* getting anything?

Essentially, how do universities factor outside scholarships when determining financial aid?

Thanks so much!
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Replies to: How Are Scholarships Calculated into Financial Aid?

  • twoinanddonetwoinanddone Registered User Posts: 20,579 Senior Member
    Schools usually do apply merit first, thus reducing the need that you have. However, most schools do not meet your full need so the outside merit money does help you.

    Even at schools that do meet full need (Ivies, Stanford), many will first reduce the student's loans or contribution requirement, allow the student to use the outside scholarships for a computer or books.
  • frozenyyogurhtfrozenyyogurht Registered User Posts: 80 Junior Member
    Oh okay, thank you very much! @twoinanddone
  • ucbalumnusucbalumnus Registered User Posts: 74,499 Senior Member
    Here is an example of how Stanford handles outside scholarships:
    https://financialaid.stanford.edu/aid/outside/

    Here is a page where UCSD describes how scholarship money is applied for those students receiving need-based financial aid (scroll down to "FACTS ABOUT SCHOLARSHIPS"):
    http://fas.ucsd.edu/types/scholarships/index.html

    Obviously, each college may have its own policy on how scholarship money interacts with need-based financial aid. For any specific college, look around its web site, or ask directly.
  • frozenyyogurhtfrozenyyogurht Registered User Posts: 80 Junior Member
    @ucbalumnus thanks so much! I will look into policies from other colleges, but I assume most colleges will treat scholarships similarly.
  • thumper1thumper1 Registered User Posts: 74,383 Senior Member
    @frozenyyogurht

    Don’t assume anything. If you really want to know a college policy on this...contact THAT college.
  • frozenyyogurhtfrozenyyogurht Registered User Posts: 80 Junior Member
    @thumper1 Agreed - I wanted to PM you with some additional information.
  • NicoleGreenNicoleGreen Registered User Posts: 53 Junior Member
    Definitely check with each school individually to see how they handle things.

    Some schools stack scholarships, meaning your financial, merit, and outside scholarships all add together. Others schools don’t and essentially your scholarships end up canceling each other out. Finding schools that stacked was one of our main criteria when we were looking for schools to apply to.

    Also, check with schools to see if your merit aid is dependent on living on campus. At some schools, if you move off campus, you loose part of all of that aid which could really hurt you down the road if you are counting on that, but don’t plan on living all 4 years on campus.
  • ucbalumnusucbalumnus Registered User Posts: 74,499 Senior Member
    Some schools stack scholarships, meaning your financial, merit, and outside scholarships all add together. Others schools don’t and essentially your scholarships end up canceling each other out. Finding schools that stacked was one of our main criteria when we were looking for schools to apply to.

    An apparently common case is limited stacking, where merit or outside scholarships can stack with FA grants up to the amount of unmet need, student loans, and student work that would otherwise be in the FA package (see the Stanford and UCSD examples in reply #3).
  • frozenyyogurhtfrozenyyogurht Registered User Posts: 80 Junior Member
    edited March 13
    @ucbalumnus @NicoleGreen When you say limited stacking, do you mean that the scholarships will only be useful up to a certain point? eg. Outside scholarships will cover your unmet need, student loan portion, then expected on-campus job, then summer contribution, and then if you have an EFC, then the scholarship won't cover that? Limited stacking AKA outside scholarships will only work up to an extent and then even if you have more outside scholarships, you'll still have to pay out of pocket?

    Thanks!
  • ucbalumnusucbalumnus Registered User Posts: 74,499 Senior Member
    When you say limited stacking, do you mean that the scholarships will only be useful up to a certain point? eg. Outside scholarships will cover your unmet need, student loan portion, then expected on-campus job, then summer contribution, and then if you have an EFC, then the scholarship won't cover that?

    See the examples linked from reply #3. In this case, the outside scholarships first replace unmet need and/or student contribution (reducing net price), but then replace FA grants (not reducing net price), before replacing parent contribution (reducing net price).
  • twoinanddonetwoinanddone Registered User Posts: 20,579 Senior Member
    If you have a 100% outside scholarship it will cover 100%. You'd get nothing from the school but you'd nothing.

    If COA is $60k, and you have and EFC of $20 and the school awarded you $20k, you'd still need $20k which might be made up of work study, loans, perhaps even a 'gap'. Say you get $30k in outside awards. It is likely the school would use that for the $20k in work study, loans, etc, and might reduce the school aid to $20k You'd still owe your EFC of $20k.

    If your outside scholarships are only for $5k, they might apply it all to the third category of loans and workstudy and let you keep all the school aid.
  • mamommamom Registered User Posts: 3,599 Senior Member
    My son was awarded 5 merit scholarships from his college. He could only accept two, because the school only allow allowed scholarships to cover up to the cost of tuition. It would have been nice to have the extra money, but I was thrilled to have tuition costs covered.
  • frozenyyogurhtfrozenyyogurht Registered User Posts: 80 Junior Member
    @mamom Oh wow, that makes sense. It's very good still that he was able to get tuition covered! Does he still need to apply for aid/scholarships each year for the tuition to be covered?
  • frozenyyogurhtfrozenyyogurht Registered User Posts: 80 Junior Member
    @twoinanddone Okay, that makes sense...it seems a bit unfair if the school were to reduce their school aid, especially considering it would have taken work to apply for and win those scholarships.
  • twoinanddonetwoinanddone Registered User Posts: 20,579 Senior Member
    The school's aid is usually based on need. If a scholarship is covering your tuition, your need goes down. Yes, it takes time to apply for the scholarships, but you won't know if you need that money until you know what the school is giving you and by then the deadlines will have passed.
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