After my college received the check for a private scholarship I won, they reduced the college aid they originally offered me. Now, I feel as if there was no benefit for my hard work in winning the private scholarship. They "stole" my scholarship. What can I do to prevent my college financial aid package from being reduced because I won a private scholarship?
Award displacement occurs when the receipt of one form of financial aid, such as a private scholarship, causes a reduction in other forms of financial aid.
When a student is receiving need-based financial aid, receipt of a private scholarship may reduce the student’s demonstrated financial need. The college financial aid office responds by reducing the student’s need-based financial aid package by a similar amount.
Colleges do have some flexibility in how they reduce the financial aid package. If the college does not meet the student’s full demonstrated financial need, they could use the private scholarship to fill the gap (unmet need). They could reduce student loans and student employment before modifying the college’s institutional grant or scholarship funds. These solutions reduce the college’s net price, yielding a financial benefit to the student. About four-fifths of colleges have such a favorable outside scholarship policy and about one-fifth do not.
Students who are affected by displacement should ask the scholarship provider for help. Sometimes the scholarship providers can influence the college’s decision, especially if the scholarship provider is giving millions of dollars to the school. The scholarship provider may ask you to sign a Family Educational Rights and Privacy Act (FERPA) waiver so that they can advocate on the student’s behalf with the school.
Here are a few ideas that may help students keep more of their private scholarships include:
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