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The good news is you received work-study, a grant, financial aid, and an outside scholarship. Great job! The bad news is that once your college found out about the scholarship, they reduced their assistance by that amount.

Huh? What's up with that?!

As unfair as it may sound, many colleges see your outside scholarship as success they can cash-in on themselves, or at least share what was initially your money with another needy student.

Take, for example, the policy of Gettysburg College (Gettysburg, PA). After you proudly declare your outside scholarship amount, this college splits its own free money (scholarships and grants), and/or loan money (financial aid and work-study), by 50 percent of your outside award amount.

In real terms, if your outside award is $1,000, Gettysburg College, like many others, will deduct $500 from your grants and $500 from your loan. This is called an adjusted aid award.

This all-too-common practice may leave you feeling as if it is pointless to even apply for outside scholarships, right?! Why go through the hassle of searching for extra college cash if your school will just deduct it from their award to you? Isn't that the same as not getting the outside scholarship at all?

"Not exactly," says Ron Shunk, director of financial aid at Gettysburg College. "By reducing loans and work-study, the student comes out ahead." What Shunk means is that when your outside scholarship goes toward defraying the amount of loans you're required to take out, that will ease your debt load after graduation. Simply put, a smaller loan now means a smaller interest bill later.

Not all colleges follow these award-deduction methods, however. Some colleges recognize the problematic nature of this practice and elect to deduct your full outside scholarship amount completely from your loans (i.e., future interest-bearing debts).

"First, we'll allow the scholarship to satisfy any unmet need," says Cindy Bolger, director of financial aid at the University of Richmond, Richmond, VA. "Then we will reduce the loan or work-study. Finally, we'll reduce a grant if necessary." It all comes down to the federal law, which prohibits schools from over-awarding to students.

When it comes to financial aid, colleges differ in their policies about deadlines and allocations. And, this info doesn't come with your FAFSA (Free Application for Federal Student Aid).

But you, as a tech-savvy money-seeker, can access one of the quickest, most in-depth methods to research all of this ­ the Internet. Shunk suggests FinAid. "It's the financial aid Bible on the Web."

Bolger offers a low-tech alternative: "Simply ask. Wait until after you get an award, but before you accept an offer of admission to make any decisions."


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Amanda Fornecker is a staff writer at The CollegeBound Network. Learn more about finding a school that's right for you.

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