<p>On Friday, while meeting with a university FA officer, I was told that some donors give the scholarship funds directly to the student. He pointed-out that proff-of-enrollment forms are available at the Registrar’s Office.</p>
<p>I am such a newby I don’t really understand what that means and don’t know what to ask next. </p>
<p>He had just printed an estimate for me. I had no idea that there would be 7 different categories of scholarships/grants/loans listed on their form, not including:
Off campus Scholarships
Private Loans
PLUS Loans
Work study</p>
<p>I had asked what goes away first, second, third if a student receives a large, outside scholarship.</p>
<p>Was he telling me that the university won’t know about funds given directly so scholarships won’t BE taken away in that case?</p>
<p>CK</p>
<p>NO, I doubt if that is what he was telling you. </p>
<p>In most cases outside scholarships even those paid directly to the student must be reported to the school. You need to check the school’s policy for outside scholarships. Some will allow you to apply to unmet need (not the EFC), while others will first reduce student loans and work study.</p>
<p>Thanks. Who requests proof of enrollment forms?</p>
<p>Also, the order he listed in which their FA categories will be replaced are:
- Gap - $4600
- Work Study
- Federal Direct Subsidized Loan - $3500</p>
<p>All insight will be appreciated.</p>
<p>THe grantor of the scholarship is eventually going to request proof of enrollment because they are paying out the money. They will report the earnings to the IRS, because they will have to justify giving the $$ out. </p>
<p>Keep in mind that all monies over the cost of tuition and books are taxable income to the student, and the student will be required to put it on the FAFSA (the school will eventually find out that there are scholarship $$). Your choice will be will it be worth it to not report a few $$ or risk losing all financial aid from the school and (possibly admission/ having degree rescinded) due to willful misrepresentation.</p>
<p>If this school has told you that this is the way they are going to apply the $$ than this is how it will happen.</p>
<p>Cost of attendance - EFC (based on income & assets of student and family) + demonstrated need</p>
<p>Lets say: COA = $50,500 EFC = $25000 Aid = $20,500 (which includes $3500 loan + 1500 ws) leaving a gap of $5000</p>
<p>Child receives $5k Scholarship</p>
<p>If they first apply the scholarship toward the gap, then 100% of your need is met (lil CiChildkeeper will have the loan and the w/s)</p>
<p>However, if they use the scholarship toward to reduce the loan and the w/s, lil CiChildkeeper, may still end up taking out a loan just to fill the gap (unless you are going to pay the gap along with your EFC, making your out of pocket costs $30k.</p>
<p>Actually, at some schools outside scholarships won’t in fact reduce aid, unless the value of the scholarship plus aid ends up more than the cost of attendance, unless Federal aid is involved. There are specific rules regarding Federal aid, and those outside scholarships reduce need related to qualifying for Federal aid, however, schools can do what they want with their own money, and some choose to let their students benefit from any outside scholarships they bring with them - otherwise, if they meet need, why would students bother applying for outside scholarships?</p>
<p>I agree scholarships should be reported, but this could be one of those schools that allows you to keep your aid package.</p>
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<p>Because out of the nearly 4000 college/universities in the country, the overwhelming majority of them do not meet 100$ demonstrated need. If the outside scholarship helps reduce some of the gap that the parents would be responsible for paying in addition to their EFC, why wouldn’t a student try to use outside scholarship monies to help reduce the gap (if the school allows the $ to go toward the gap)?</p>
<p>From what you have said, it appears that if you get any outside scholarships, unless they go over your $4600 gap they won’t affect your financial aid at all. If they go over, they will come out of your Work Study Award, which you can replace with non work study work which if often available around schools and then it will come off of your Stafford Subidized loans which you can then take out as unsub if your college’s Cost of Attendance is enough to justify all of this. You can use the Stafford loans on an unsubsidized basis to pay some of your EFC if necessary. If you don’t have to do so, don’t. Taking out those loans at 7% interest with the meter starting to tick the moment the funds are dispensed is not a wise financial decision unless you really need that money. Time enough in the future to take out loans.</p>
<p>sybbie719
I’m guessing Gap is unmet need - I didn’t understand that. Since Work Study is second, it sounds like the outside scholarship funds go to the first two places I hoped.</p>
<p>I’m not thrilled that the no interest loan goes away next. I was hoping the Federal Direct Unsub Loan would be next.</p>
<p>CTScoutsmom
He did list the maximum and the 4th amount that will be reduced is the grant from the college (have not yet been told that amount).</p>
<p>Thanks all! I have a much better understanding and a list of questions for him once we receive the offer.</p>
<p>Some colleges do not give the Federal Direct Unsub Loan as financial aid, but leave it available for the student to use towards EFC. DOn’t know if that is the case. That part of the Stafford loan is really not financial aid since ANYONE even those with zero aid, like the Trump kids can take out Staffords on an unsubsidized basis as long as the total educational loans and scholarships do not exceed the COA of the school. So that might be why it was not listed.</p>
<p>Until you get your financial aid package and your outside scholarships, it’s hard to say what your situation is. It appears as though if the school knows your gap is going to be $4600, that you may get grants in the amount for the numbers given to add up to the school COA. But until you have the bird in hand, it’s all speculation.</p>
<p>If you get merit money from the school, that would not be reduced most of the time by outside awards unless it is considered merit within need and under the financial aid auspices.</p>