Effect of scholarship on financial aid

I was at an info session with my daughter recently put on by a top private
college. The college's rep said their financial aid is always composed of
three elements: Work study and loan (amount of each is the same for all
students who get aid), and finally the grant, which is as large as necessary
to meet the demonstrated(and unlike the first two components varies from
student to student who gets aid). He said if a student is awarded a
scholarship it is taken dollar-for-dollar out of the grant portion. So, for
example, if the student has a 10,000 grant, but then gets a $4000
scholarship from some outside scholarship source (for example, wins Cola
Cola scholarship award), the grant drops to $6000. So the student's hard
work saves the college some money but does the student no financial good
since he will still have the same work study obligation and loan amount.
Several weeks later I went to an info session put on by four very top
colleges, and some of them appeared to say in this scenario the $4000
external scholarship would reduce the student's loan or work study
obligations.
How do most top private schools handle scholarship $ awarded by outside
sources? Do they just use it to reduce their grant award or do they let the
student use it to reduce his loan and/or work study obligation?
Thanks.

Relampago.RemoveThis@aol.com

Each college will have their own policy on how they award aid and how
outside scholarships affect aid.

While Stafford loans are usually the same $2,625 for all incoming
freshmen, there are Perkins loans that will go only to some students and
then in varying amounts due to a limited supply of funds. Work-study
also will usually only go to some students, and in varying amounts -
again a limited supply.

Assuming that the student's full aid eligibility (or "need") was filled,
outside scholarships reduce need, and the college will take back some of
the aid award. Some colleges will offset the outside scholarships
against gift aid (grants, scholarships, awards), while others will begin
by reducing loans and work-study. If the student's full need wasn't met
by the financial aid some colleges will take back nothing as long as the
totals of college and outside aid don't exceed need, while others will
do an offset anyhow.

It's really up to each school's policy and the only way you can really
know is to ask them.

--
Steven B. Blank
College Financial Aid Consultants
29 Ives Hill Court
Cheshire, CT 06410
(203)250-7761

tpd wrote:
> I was at an info session with my daughter recently put on by a top private
> college. The college's rep said their financial aid is always composed of
> three elements: Work study and loan (amount of each is the same for all
> students who get aid), and finally the grant, which is as large as necessary
> to meet the demonstrated(and unlike the first two components varies from
> student to student who gets aid). He said if a student is awarded a
> scholarship it is taken dollar-for-dollar out of the grant portion. So, for
> example, if the student has a 10,000 grant, but then gets a $4000
> scholarship from some outside scholarship source (for example, wins Cola
> Cola scholarship award), the grant drops to $6000. So the student's hard
> work saves the college some money but does the student no financial good
> since he will still have the same work study obligation and loan amount.
> Several weeks later I went to an info session put on by four very top
> colleges, and some of them appeared to say in this scenario the $4000
> external scholarship would reduce the student's loan or work study
> obligations.
> How do most top private schools handle scholarship $ awarded by outside
> sources? Do they just use it to reduce their grant award or do they let the
> student use it to reduce his loan and/or work study obligation?
> Thanks.
>
> Relampago RemoveThis @aol.com
>
>