Let’s say your guidance counselor tells your high schooler that she should find an “outside” scholarship – one offered by a foundation or other group rather than a college financial aid office. Often these scholarships are targeted at students who meet a specific set of criteria. For example, a San Francisco Bay Area family foundation offers $5,000 scholarships to local students who have good grades and 50% or more Filipino ancestry. Another offers awards to students who are African-American and want to study business. These are indeed great opportunities to gain “free money” for college.
But here’s the catch. If your student receives a $5,000 outside scholarship, your expected family contribution will not go down by $5,000. Instead, the college she ultimately attends will reduce her financial aid offer by $5,000. To illustrate:
| Before Outside Scholarship | After Outside Scholarship | |
| Cost of Attendance | $50,000 | $50,000 |
| Expected Family Contribution* | (20,000) | (20,000) |
| Student Need | 30,000 | 30,000 |
| Financial Aid ** | $30,000 | 30,000 |
| less Outside Scholarship | (5,000) | |
| Revised Financial Aid ** | $25,000 | |
| What Your Family Pays (aka the “Net Price”) | — | $5,000 |
* As determined by every institution but following certain guidelines.
** Package can include grants/scholarships, work-study and loans.
So before you spend a lot of time and energy chasing outside scholarship money, visit the College Board’s website and use their tool to get an idea of what your family may be expected to contribute to college costs: https://bigfuture.collegeboard.org/pay-for-college/paying-your-share/expected-family-contribution-calculator. Use another of their tools to further estimate the “net price” that a specific college or university could expect you to pay: https://bigfuture.collegeboard.org/pay-for-college/tools-calculators. If you discover that you’ll probably be expected to contribute the at or near the full amount of a college’s cost of attendance, then time devoted to searching out and applying for outside scholarships can be well worth it.
