<p>Can someone please explain why schools care where you get the money to pay the family contribution portion of the cost? Why should it matter to them whether the money comes from Mom and Dad’s savings, Uncle Harry’s retirement fund, or from some company who wants to reduce their taxes via a scholarship program? Why must colleges penalize a smart student who has taken the initiative, and put in the time and effort to enter and win scholarships? Why is it different if the student earns money by working at McDonald’s than if he does so by writing essays for contests?</p>
<p>I know that first outside scholarship money can be applied to school-given loans, work-study, and the student’s contribution, but if the student were to win a large award, their grant would be reduced accordingly. I’m not sure why people keep suggesting outside scholarships as a good solution to paying for a school when financial aid is inadequate. It can help a little, but only for the first year since the vast majority of scholarship are for HS seniors.</p>
<p>yeah actually i was thinking the same thing too. people always told me to apply for scholarships, and cited some large (million dollar) amount of unclaimed scholarships. but actually at all my universities, i got college scholarships, so all those 20-some scholarships I applied for are useless (even in the unlikely chance i got all of them), except for my resume. what sucks is that i spent so much time on scholarships instead of sleeping…</p>
<p>They care where your EFC comes from? I thought as long as they got a check that was not a scholarship, then it was okay… In that case Uncle Harry should slowly transfer money over to mom and dad’s account starting NOW.</p>
<p>The Majority of outside scholarships first reduce the self help aid (work study/loans) then it reduces the grant money given by the schools . You would essentially have to have a full outside scholarship before the EFC/student contribution is reduced (may be with the exception of a few scholarships).</p>
<p>They care because in these cases uncle harry is a source of income and must be documented. </p>
<p>As unfair as it may seem it tries to keep the process above board and as honest as possible as otherwise what would stop parents (besides the IRS) form transferring assets to uncle harry in order to present themselves “poorer” than they are in the face of FA and basically defraud the system?</p>
<p>I only mentioned Uncle Harry as a catchy way to get people to read the thread, since last time I posted this question no one answered. My S doesn’t have a rich uncle, so what I really want to know is why a college cares how you meet your EFC as long as it’s legal. If you get money from an outside source, such as a scholarship contest or even Uncle Harry, then of course you’d have to report that as income or a gift or whatever and pay taxes on it according to the rules. An outside scholarship would then show up on the FAFSA and possibly raise your EFC for the following year. I have no problem with that–that’s fair. But the way it is now, unless there’s something I’m not understanding, an outside award is assessed by the college at 100% and is assessed immediately–unlike all other income. So it seems to me that an outside scholarship will reduce your financial aid TWICE–once in the calendar year you get it (because it immediately reduces your grant for that year), and then again the next year when it shows up as student income on taxes and FAFSA.</p>
<p>PS As far as the fraud issue, it is not the college’s job to prevent Uncle Harry from money laundering or to stop some parent from transferring assets to Uncle Harry. Frankly, liquid assets matter very little in the formula anyway–it’s mostly income. We plugged in our estimated financial data for next year, with a savings account reduced by the amount we will need to take out for this year’s tuition; our EFC didn’t change. And basing the EFC mostly on income is as fair as it’s going to get. Otherwise, if Family X and Family Y make the same income, but Family X decided to take expensive vacations every year instead of saving for college, they’d have to pay less for college than Family Y.</p>