I’ve been summoned. It depends on whether or not your school will stack their own aid with others’ aid. If it does not (many schools, including almost all ‘top’ schools), the situation looks like this:
Suppose you get:
$30,000 institutional grant
$20,000 outside scholarship
and have a $50,000 COA
The institutional grant gets reduced to $10,000, so you still only have $30,000 in gift aid. You net 0.
If your school DOES allow stacking their own aid and others’ (more common among schools that offer automatic/less-competitive merit, lesser known privates, etc), the situation will look like this:
Suppose you get:
$30,000 institutional grant
$20,000 outside scholarship
and have a $50,000 COA
The 30k adds with the 20k and you meet full COA. You will get in cash, as a refund, the remainder of this: COA - Direct Expenses to the school. So if direct expenses was 45k, you would get 5k in cash as a refund.
You will never get more than COA - Direct expenses in cash. I won over 420k in 2015, and my degree only costs a little over 200k. So I’m in an overage situation every year – which means I get the amount that = COA - Direct expenses (in my case, about 20k/yr) in cash refunded to me by the bursar, but no more than that.