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Don't Let Scholarships Negatively Affect Your Financial Aid

April 1, 2024
By Kassandra Sweatt

Don't Let Scholarships Negatively Affect Your Financial Aid

Did you know your financial aid can be negatively affected by outside scholarships? Displacement, also known as a financial aid “over-award,” is when a college reduces your financial aid because you received scholarships from other sources, such as an outside scholarship from a community organization or local business.

Displacement most often occurs when a student’s original financial aid offer amount plus outside scholarship amount(s) exceeds the total cost of attendance for that college. Colleges have different policies for financial aid over-awards. Here are two examples:

  • Boston University’s policy states that any financial aid reductions will be applied to self-help aid (need-based loans or federal work-study) first. Grants will only be affected if the over-award exceeds the total amount of self-help. 
  • Macalester College’s policy states that if a student receives more than $500 in outside scholarships, grant aid is reduced first, then need-based loans and/or federal work-study. 

There are many more ways colleges handle over-awards. Here are three steps you can take to avoid displacement:

1. Determine your college’s displacement policy

Research the policy regarding outside scholarships at your college by searching your college’s website or reaching out to your college’s financial aid office for more information.

2. Discuss displacement with your scholarship provider

Contact your scholarship provider and see if it is possible to use your scholarship in the summer, for a future academic year, or to save your award until after graduation to repay any loans you have borrowed.

3. Reach out to your financial aid office

Talk to someone in your financial aid office and see what options you may have to avoid displacement. While we cannot guarantee any course of action, some schools may increase a student’s cost of attendance based on a student's individual expenses while attending school. You can also see if it's possible to have your work-study or loans displaced first, before any grants are adjusted. 

If you have more questions about outside scholarships or are looking for support with other parts of the financial aid process, we are here to help! Check out uAspire's resources, contact, or request scholarship support