Outside scholarship

The student applies for and receives the scholarship. The donor sends funds to the institution or to the student. The aid office adds the amount to the student’s total aid, recalculates need, and adjusts other aid if necessary to avoid an over-award. The scholarship is then disbursed or refunded according to the donor’s and institution’s rules.

Example: a student receives a $2,000 scholarship from a professional association. The aid office reduces the student’s Direct Unsubsidized Loan by $2,000 to keep total aid within the cost of attendance. The scholarship funds are credited to the account and the lower loan amount is certified.

An institutional grant is funded by the college. A Pell Grant or state grant is public aid with statutory formulas. An outside scholarship is private and may carry donor-specific conditions such as a required major, service obligation, or progress report.

Failing to report an outside scholarship, which can produce an over-award later. Assuming an outside scholarship can be stacked on top of full need-based aid without adjustment. Expecting every employer tuition benefit to be excluded from the aid calculation.