How Outside Scholarships Affect Financial Aid Awards - COLLEGEdata - Pay Your Way

How Outside Scholarships Affect Financial Aid Awards

What happens to your financial aid if you are awarded college money outside the college?

Every college has a policy that specifies what happens to your aid offer when you win a scholarship from a provider not affiliated with the college.

Outside Scholarships Will Affect Your Aid Package

Colleges are required to reduce your financial need by the amount of any scholarships and grants awarded to you by providers outside the college. The aid the college is offering you will be affected as a result.

Some colleges will first reduce gift aid (grants and scholarships). Others will reduce gift aid only after all self-help aid (loans or work-study) has been subtracted, or they will reduce self-help and gift aid equally.

What to Do If You Get an Outside Scholarship

  • Report outside scholarships to the financial aid office. This is required by all colleges.
  • Ask how the scholarship will affect your aid offer. If the college reduces your gift aid, your scholarship may be far less valuable than you expected.
  • Don't ask if your Expected Family Contribution (EFC) can be reduced. By federal rule, this is not allowed.
  • If the scholarship is not renewable, consider asking the provider to disburse the money over four years so the impact on your financial aid is spread out.

Getting outside money for college is, by and large, a happy problem. In most cases, you'll get loan relief and be able to keep the grants and scholarships that your college awarded you.

What's Next?

Note: Financial information provided on this site is of a general nature and may not apply to your situation. Contact a financial or tax advisor before acting on such information.

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