It sounds to me like “institutional need” is the issue. It seems they have awarded aid that meets what they define as institutional need. The gap between cost of attendance and institutional need is what you need to pay. BC expects your family to pay a certain amount (cost of attendance minus institutional need). If you get scholarships, they’ll reduce loans and work study first … but they will also reduce their own grants if necessary in order to keep your total aid at institutional need.
If they offered you loans, then your institutional need was met without loans, meaning that loans in your financial aid package were replaced by the scholarship … and because they were, you have the ability to borrow those loans to pay your balance.
I understand that this is confusing. I’m glad you called to check, but it does sound like things were done correctly.