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Caution – More Could Mean Less
Beware! In some instances, receiving private scholarships (or
money from family members such as grandparents) may reduce the amount
of scholarships and grants awarded by colleges. Each college
is different, but generally if a student has been awarded their maximum
financial aid eligibility (the most they are allowed to receive) in
campus-based
scholarships and grants,
any additional money received from “outside” sources may
cause colleges to reduce their scholarships and grants by the same
amount as received from those “outside” sources.
Example: If you receive $20,000 in scholarships and grants from
a college (which, in this example, is the maximum amount you are allowed
to receive as determined by the college) and you also win a scholarship
from a local organization for $5,000, the college may reduce their
award by $5,000 so that you will only receive the maximum amount of
scholarships and grants allowed ($20,000).
While it may seem acceptable for scholarships from “outside” sources
to simply create a zero balance (colleges reduce their awards by the
same amount as your “outside” scholarships), what may result
is a reduction of the scholarship baseline for your sophomore, junior,
and senior years. In the example above, if your $5,000 scholarship
from “outside” scholarships is not renewable (only applied
to the freshman year) and your college has reduced its annual award
from $20,000 to $15,000 during your freshman year, you may continue
to receive the reduced amount of $15,000 per year in your sophomore,
junior and senior years. In this case, rejecting the “outside” scholarship
would ensure you to receive $20,000 per year for all four years in
college.
You are required to notify your colleges’ financial aid office
of any “outside” private scholarships you receive. Money
from family members (such as grandparents) that will be used to pay
for college expenses should be declared, but it is advised to use the
utmost discretion on all personal family financial matters.
Upon receipt of “outside” money, a parent may wish to
call colleges’ Office of Financial Aid and speak with a financial
aid officer on behalf of their son or daughter. Ask what the
impact would be to the scholarships and grants awarded by the college
if ”outside” scholarships are received by the student. Evaluate
what the effect will be to each college’s financial aid package.
Some colleges reduce or eliminate campus-based scholarships, others
reduce the amount of student loans, and a few will hold the “outside” money
and apply it to next year’s tuition. Each college and university
is different – call the Office of Financial Aid for answers.
Caution! Student income in excess of approximately $3,249 per
year will serve to reduce their eligibility for need-based scholarships
from both colleges (campus-based awards) and Federal
and State government funds (i.e., Pell Grants, FSEOG Grants,
and State Grants). Student wages are considered a renewable source
of income and earning more than approximately $3,249 per year indicates
your need for scholarships and grants is reduced. If you have
a job, monitor your income so you know how close you are to this approximate
annual limit. |
