CourtneyThurston:
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:
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:
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.
Some colleges have limited stacking, where merit scholarships will replace loans and work study first before replacing grants. For example:
https://financialaid.stanford.edu/aid/outside/ https://students.ucsd.edu/finances/financial-aid/types/scholarships/
So in the quoted example, if the college with a $50,000 COA offered a $30,000 institutional grant and $8,000 of federal direct loans and work study, a $20,000 outside scholarship would replace the $8,000 of federal direct loans and work study and $12,000 of institutional grant, giving you a net gain of $8,000, or reduction of net price by $8,000.