Three Steps You Can Take to Fight Scholarship Award Displacement

what is scholarship award displacementThe financial aid letter might be one of the best pieces of news you get. After months of scraping and digging, you’ve managed to put together a patchwork of scholarships that, with the institutional aid you are already getting, will finally make college affordable. Imagine the rude surprise that awaits the poor students who open that letter only to see that their institutional aid has been reduced on account of those private scholarships they’ve worked so hard to earn!

It’s called scholarship award displacement. Many colleges consider private scholarships in their internal aid calculations, so these scholarships represent money they don’t have to pay. Don’t think you’re safe just because you’re already at school, either. Many institutions make financial aid renewal decisions assuming all private funding is renewable. If you had a one-time scholarship, for instance, your financial aid package may have been reduced because there was an assumption that you’d get that scholarship every year.

If your financial aid package is shrinking, it may seem like there’s nothing you can do about it. You’ll either have to cough up more dough or throw more money on the giant pile of student loans you already have. Don’t give up yet! Here are 3 ways you can make up for displaced aid.

1) Find out what’s displaced

The good news is that four out of five colleges will replace loans and work study funding with private money first. Trading loans for aid is a good idea, since that will mean less you’ll need to repay after graduation. You may want to take another look at the federal work study money, though. If losing access to that funding means losing out on campus work opportunities, that could set you back. These jobs may provide valuable experience in your field and are flexible enough to work around your course load. It might be worth pursuing other strategies if that’s the case.

2) Look for a workaround

Many colleges have “mandatory student contribution” expectations. They want their students to have some skin in the game, so they’re not getting “free” college. If your college is part of the one in five that replaces grants and non-repayable aid with private assistance, this may be part of the reason. However official these policies sound, they’re just rules, and rules were made to be broken! Ask your college financial aid office if it can waive the requirement. If you encounter reluctance, explain that it would only be for the duration of your private scholarship. This may make the office more receptive to the idea.

3) Put it off

If there’s one lesson you’ve learned as a college student, it’s the power of procrastination. It can work for you, at least with scholarship money. Get in touch with your scholarship provider and ask them to defer payment of the award. You may have more significant financial needs, like course-specific fees, in future years. In the worst case, many of these awards can be used to repay student loans after you graduate!

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