Ethics of Outside Scholarships

swimcatsmom
Fri, 06 Jul 2007 12:13:50 +0000

I just read a post, on another thread, by Swimcatsmom, that points out that non-scholarship student income is protected from being used to offset aid to some degree. I don’t understand the philosophy behind this distinction, does anyone know why the two are treated differrently.

I’m not sure I understand the question . A certain amount of student income (@$3000)) is protected in the FAFSA formula when it calculates the EFC. 50% of income over that goes to the student portion of the EFC. Scholarship money is all protected in the FAFSA formula so would not be used toward the EFC at all. (some scholarship money might be taxable so would be included in the AGI but then deducted on one of the worksheets). The EFC is the basis on which financial aid is calculated (for FAFSA schools).

So scholarship money is not used in calculating the EFC. Financial need is the difference between the EFC and the COA. Scholarships (whether from the college or from outside sources) are awarded specifically to pay for college so will reduce that ‘need’ dollar for dollar.