by Tom O'Hare | Jun 16, 2023 | College Planning, Financial Aid
The season for scholarship awards. Congratulations to ALL
Recognition of academic and personal accomplishments in and out of school. Shared with students and families at commencement ceremonies, local civic and community award dinners, and workplaces for employees’ children. Valuable financial resources that students and their parent(s) spend countless hours researching, searching, and competing applications. Funded by individuals, groups, and philanthropic donors who support students and families working to finance their education to career journey. Vital for first-generation, low-income families, students already enrolled, or even those returning to complete a journey started.
Scholarships are a valuable gem that, when found and received, can mean the difference in attending, squeezing a tight family budget, or turning to borrow from a private education loan lender. As an advisor, I encourage students and families to seek these valuable financing resources. I have co-authored a Scholarship Workbook with my colleague Shelley Honeycutt of Pivotal College Years.
But there is a hidden dilemma, a concern that students, parents, and even the providers of these valuable financial resources may need to be made aware of – Scholarship Displacement.
Scholarship Displacement is a practice used by many private and public colleges and universities, often resulting in a negative net gain for students and their families. An action governed by institution policy, not a regulatory requirement, whereby a school replaces its funds with external scholarship funds. A swap, saving (replacing) the school funding and leaving the student and family absent of the resources they worked hard to secure.
Federal Regulations require a school to adjust a student’s need-based aid package to prevent an over-award when made aware of (receipt of fund or a letter) of the awarding of external funds. In question is not the occurrence of an overworld, but what action the school takes to correct the problem. In most cases, the school swaps out the funds for a need-based grant they have extended to the student as part of their enrollment and recruitment practices.
- Be sure to read your school statement regarding outside aid, private, federal, or state aid that arrives after a school has calculated and awarded need-based aid.
So, what is the solution? Here are some suggestions if you find yourself (student/family) in such a predicament:
Contact the Financial Aid Office to inquire:
- What is the institution’s procedure for adjusting a need-based financial aid package in the case of an over-award caused by an external scholarship?
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- Deduce or eliminate a Direct Student Loan (subsidized or unsubsidized) or Federal Work-Study award? 100% preferred action.
- Ask the school to allow the funds to pay indirect educational costs, including a computer, transportation, food, academic support services, and other campus expenses.
- Credit the scholarship to a future semester or academic year
- Will the institutional need-based grant be untouched?
- Does the school have a tolerance dollar value where no action is required?
If the school takes no action, it may be up to you to eliminate the over-award. This may require the student to:
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- Decline the Federal Direct Loan or Federal Work-Study up to and including the total of the external scholarship amount, eliminating a loan. A 100% preferred action.
- Notify the scholarship provider you have been the victim of Scholarship Displacement. They may not even know. Ask them to communicate with the school to request that the funds be used for educational costs, including a computer, transportation, food, academic support services, and other campus expenses.
- If you know the school’s practice and policy and can inform the scholarship provider before the award, they can take corrective action, including delivering the funds directly to the student.
- Ask them to discontinue using a School Notification Form, which placed the burden on the student, and family to notify the school that you have an external scholarship.
Along the way, there may be some pushback regarding the IRS Tax Codes. OK, technically, the awarding of scholarship funds should be considered untaxed income. OK, follow the tax codes; however, in 2024-2025, the question regarding untaxed income is projected to be removed.
Thanks to the work of Michele Waxman Johnson, Zanya Lewis, my colleague Shelley Honeycutt, and countless others, many states are waking up to this concern and passing legislation to stop Scholarship Displacement. Contact your legislative representatives locally and nationally to make them aware of this concern.
Financing college is hard enough.
by Tom O'Hare | Jun 15, 2023 | College Planning, During & After - Just Thinking, Financial Aid
Congratulations, Class of 2023
WOW – To the students and the parents of the graduating Class 2023 – WOW
Kindergarten, elementary, middle, high school, college, and graduate students – Congratulation!
It is time to pause, recharge and refuel. But let’s not hit the pause button for too long.
No summer sliding unless it is down the famous slip-and-slide in the yard.
Whether moving up a grade, to a new location, taking on an internship or apprenticeship, or joining the workforce, use the summer to champion forward. The Route One family is here to help!!
Exciting News!
We are thrilled to announce the release of our latest book, the “Pivotal College Planning Workbook,” now available on Amazon!
Unlock the secrets to successful college admissions by discovering valuable tips on your college search, securing funding, insights into financial aid, and more. Order your “Workable Workbook” today – available on Amazon now: https://amzn.to/3NG0BX7
Summer Checklist
Protecting Your Student and Family
In the eyes of the legal and medical world, when a student turns eighteen years of age, they’re an adult. Yes, we will always consider them our little kids, but it is important to put the correct documents in place to continue advocating and supporting them. Review and put in place safeguards before they leave home-
- HIPPA Agreement (medical)
- Durable Power of Attorney (legal)
- Liability Insurance (financial), and
- FERPA Waiver (college).
Speak with a professional to protect your student and family.
Summer Assignment – Read and Explore
Reading is fundamental. It improves English, writing skills, and vocab. In my private counseling practice, I ask all students to spend time reading during the summer. One novel a month. If sharpening academic skills, study habits, and testing prep is needed, consider introducing a tutor to the summer schedule.
For families of 10th and 11th grade students use the summer to pop on to a college campus. Check out a large, small, city or one located in a town. Students who have never seen or been on a campus will benefit from a brief (not a tour) look at what might be in their future.
Scholarship Employment
Working during the summer is important for high school or college-age students. It provides valuable spending money when returning to school. But there is an equally important summer job, a Scholarship Searcher. Committing time during the summer to research, identify, and create a database of eligible scholarships is an important job for rising seniors, 11th and 10th grade families. Its reported that hundreds of scholarship with Fall application deadlines are left in the money room. Obtain a copy of your Scholarship Workbook, how to be a scholarship searcher by subscribing to Pivotal College Years.com. Don’t wait till the Fall to learn you missed a valuable financial resource.
Rising Seniors
Get ahead of the Fall. Spend time on critical assignments to make the senior year enjoyable. If you’re college-bound, focus on four critical tasks:
Drafting your Essay
Completing the Profile Section of the Common Application
Narrowing your college options
Engaging your College Representatives
If your path after high school will lead in a different direction, don’t delay. Your planning process needs attention too. Whether it will be a skilled apprenticeships, work, or services, use the summer to map out your post high school pathway.
.Parents – your task is to determine your college financing strategy, and it is not just about your family resources. Where you apply is equally, if not more, important!
Right Around the Corner -Repaying Federal Education Loan
The end is nearing pandemic freeze on the repayment of Federal Student Loans is over. Repayment is set to restart in September, with the first payment due in October. It is time to dust off your Student Aid ID and PW to check your loan details and determine the next steps. Regular monthly payments, applying for an Income-driven repayment program (IDR), or Public Service Forgiveness Program (PSLF), and refamiliarizing yourself with your loan servicer. Consult the Federal Student Aid website to learn more https://studentaid.gov/
Education loan refinancing and modified repayment may be an option for a family whose budget has continued to experience financial strain.
Employer-sponsored education programs is no longer just tutition reimbursement. Today companies are offering employees services to help with student loan repayment, managing education debt, financial literacy and even colege planning advising. Consult with your companies HR department or associations employee benefits provider.
Consult an Independent Education Advisor
Need help with your checklist, calming the waters, managing education loan repayment, or hosting an onsite employee education and enrichment session? Consider speaking with an experienced Independent Education Advisor. Get College Going, a North Shore-based full-service education advising practice, has been helping families for four decadents through its extensive resources and expertise before, during, and after college. Visit www.getcollegegoing.com to schedule a conversation.
