Fin Aid & Merit Discussion for class of '27 Undergrad/'25 Grad

Forgot to add accept to IU trombone studio on Monday too!

Oops! Didn’t mean to add this here. We don’t have financials yet and I can’t figure out how to delete and move to the correct thread :rofl:


Hi friends!

Since we are looking seriously at a school that I’m pretty sure does practice scholarship displacement, I’ve been reading a lot about the practice. Basically, any outside scholarship your student may receive can reduce their financial aid award or scholarships from their college or university.

I think this is awful for students who’ve worked really hard to get outside scholarships, but there are ways you can make the best of the situation. #2 below is probably what we’ll go for if the need arises, followed by #3 if necessary.

Questions from Financial Aid Displacement: What Families and Scholarship Providers Should Know - Scholarship America

As you can tell from the disparate ways of dealing with it, displacement can seem overwhelming for students and families navigating the world of financial aid. When it comes down to it, there are really three vital questions to ask.

  1. Does my college practice either partial or full displacement?
    If the answer from the financial aid office is “no,” you’re in the clear.

  2. If displacement is practiced, will the college reduce loans first?
    This is the best-case scenario if a school answers “yes” to the first question. If they’re going to reduce any part of the financial aid package, you want it to be the amount of loan aid, not grant aid. (That way, even though you’re losing out on some funds, they’re funds you’d have to pay back after graduation.)

  3. Do I have to use my private scholarship for this year’s tuition?
    Financial aid packages differ wildly, and so do private scholarship guidelines and restrictions…contact both your school and your scholarship provider to explore your options. It may be possible to defer the funds to a subsequent year when your need may change; it may also be possible to use the funds for books, room and board or other fees not reflected in your aid package.

This is why it’s best to go after schools with auto merit.

If they are giving need funds, you are in essence covering your need. So they will pull those back.

There are lots of auto merit schools where you can avoid this.

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That’s true! But some schools that will reduce merit, too. I’ve run across one of those on our list, and that’s something I want to be sure we don’t get into. I don’t think this is true, but it worries me that it might reduce the merit for all four years, when the outside scholarship is only for one.

The school we’re looking at is pretty clear as far as their published merit (if not “auto”), and my kid has gotten their top scholarship, but they’ve also given us a grant. We didn’t know about displacement before he/we made him apply for several outside scholarships. A few are really good possibilities, so when I found this out I was disheartened.

Wow! Thank you for sharing this. Just when I think I’m caught up on all the ins and outs of this process, something new pops up. I had never heard about scholarship displacement. Our child was just awarded a scholarship today. And, just like that, the worry sets in that it won’t even be a true financial “award”. What are the clues that a clues that a school participates in such a dreaded practice?

Impressive he earned outside. Not many do.

Neither of my kids lost money on their outside from my employer) but both were merit. Both sent us refund checks when they received the $$. Both are public. Perhaps that makes a difference ?

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@BeverlyWest my kid earned a bunch of outside scholarships…about $4000 worth. They were for freshman year only. Since we didn’t get any need based aid, it was not an issue.

In most cases, reductions are first made to the self help portions of need based aid…loans, work study. You can find out what your son’s schools actually do. They will tell you. If this means he doesn’t need to do work study, or doesn’t need to take out loans for that first year, that isn’t a bad thing. He can still do gigs or work off campus.

@tsbna44 this student has a music performance merit award…it’s a little different than what your kids had because it’s based on the strength of this kid’s audition compared to others doing auditions on the same instrument.

But I do agree…merit aid is seldom reduced when outside scholarships are received. If this happens, please share the college…because that would be good info for others.


Nooo!!! Don’t worry! I am so sorry I made you worry. I am not an expert, and I’m sharing things I’ve learned just by reading the Internet, which is of course, as we always remind our kids, :100: percent correct. :slight_smile:

It’s probable your kid’s chosen school does not do this. It’s not every school, and I am looking into it mainly because of a particular school we’re interested in. (Also note, there are some states where it is illegal, so it’s not a done deal that it will happen to you.)

Even if it does, there are several things you can ask for (like #2 and #3 above). I have an even bigger list than those questions shown above. Reducing unmet need first, eliminating loans, spreading money over two years, having it apply to books and things not normally billed by the school, etc.

To answer your q: I know very little, but I have seen schools sites that say things like “this amount may be reduced at our discretion based on other resources”. It’s rather mysterious. Also, at the bottom of your financial aid letter, it may say something like “this estimate may change at any time” and other scary things. I think every FA letter says that.

My guess is that most schools will work with a family to do something like the things noted above. I suppose the best way to find out is to ask the FA office, but I don’t know if displacement is a good way to refer to it. Maybe just ask about the policy around outside scholarships.

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Yes…this is what you should ask.

I second this. Have not heard of outside scholarships impacting music awards. Mine declared a small amount of outside scholarship ($2K if I recall) prior to his first year. No impact on his full tuition merit award, no impact on his need based aid for room/board and fees. I would assume some schools would decrease need based aid which makes sense because the outside scholarship decreased the need. But the merit scholarship is based on talent which should not change from the initial offer.


I have only ever dealt with schools that adjust NEED-based aid because of outside scholarships. All music merit aid in particular is generally safe. It is confusing when the FA Office sticks all aid into a single statement. With my children’s institutions, there was always a clear request to report any outside scholarships each year so that need-based aid could be adjusted accordingly.

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It’s very common and happens to non/music students too.

The rationale is that college grants are to meet the family’s financial need, as calculated by the college based on FAFSA and (sometimes) CSS Profile data. That data doesn’t include outside scholarship money, so when the student receives an outside scholarship the family’s need is now less and the college adjusts their need-based aid to meet the new need.

But, as posted above, some schools will apply the outside scholarship to the loans and work-study component first, which is much better then applying it to their grants.


It sounds like no one has had any trouble with their merit/music money. That’s great to hear!

I think it will be well worth eliminating the self help aid. It’ll be so nice to not have freshman year loans. Or, if S goes to one of his public choices like Denver, we don’t get aid there, so it’s easy.

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