It's amazing how some ideas persist over time. Outside scholarships have long been a resource that many families have sought out as a means to lower their college expenses. I am talking about scholarsips offered by private organizations or any funds sourced from outside of the college. I have seen countless proclamations and advice columns on where to find the latest outside shcolarship offers. Many colleges devote entire web pages that point families towards these types of scholarships. I have seen many guidance teams and admissions counselors point students and families in the direction of outside scholarships. So how can these scholarshps hurt you?
Let me be clear, at some colleges an outside scholarship will "stack" on top of additional aid that the college awards. In these instances, these scholarships can help you. If you go in-state with the Hope Scholarship in Georgia, an outside scholarship can help you. However, have you ever wondered why a college requires you to disclose any outside scholarships funds that your student has been awarded?
For many colleges, the simple fact is that they are going to use the outside scholarship to replace, dollar for dollar, any aid they had already allocated to your student. In other words, they will "blend" your scholarship. Reecy Aresty makes a point that the colleges benefit from the scholarship instead of your student in this recent article from the Huffington Post. He goes as far as calling the private scholarship issue "A Billion-Dollar Rip-Off." The College Board also makes this statement on their site, "it’s up to your college to decide what type of financial aid to reduce or cut if you receive an outside scholarship. Some cut down the college’s grant." The truth is that applying to outside scholarships can be time intensive. Are outside scholarships an efficient use of limited time and resources? Why not spend the time focusing on your SAT or ACT test? Increases in these test scores can easily net thousands of additional aid dollars from the college. In additon, aid dollars from the college are where the substantial discounts really come from but I will leave that for another upcoming blog post.