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Looking for opinions on this situation:

My daughter will be a freshman at a private college in Sept. She is receiving financial aid and we are required to report any outside scholarships she receives.

The first X dollars in outside scholarships do not reduce her aid, but she has exceeded that amount, so additional ones will result in a dollar-for-dollar reduction in aid.

She recently received three awards at high school graduation. Two were labelled "scholarships," so we will report them. The third was "The John Doe Memorial Award" - no mention of the word "scholarship."

In all three cases, she received checks payable solely to her.

Should we report the John Doe award to her college?

By Lhomme (Lhomme) on Tuesday, June 17, 2003 - 12:57 pm: Edit

I'm my opinion yes. They use these 'scholarships' and use them to alter your income. The first x dollars thing is a motivating factor to actually seek outside scholarships (to remove some of the financial burden off the school) but also to restrict you from actually profiting off financial need aid. One question, is that cutoff limit the point where family contribution, work study and loans are 0 (thats the way it is with my college)?

Keep in mind that if the college found out you 'lied' to them it could have negative consequences.

On another note, congratulations to both you and her on her success! Few people have too many scholarships!

By Dolce (Dolce) on Tuesday, June 17, 2003 - 02:06 pm: Edit

Do most colleges apply outside scholarships toward EFC? The website of my son's 1st choice college says something to the effect that "outside scholarships may reduce your amount of need-based aid." Why would any student work their tail off writing essays, doing projects, submitting applications for scholarships, etc, if the amount of outside scholarships merely is applied to the EFC? And does anyone remember where on this site someone posted a well-written letter that an outside scholarship provider could send to the school, emphasizing that the scholarship money was NOT to be used to reduce need-based aid? (hence basically benefitting only the school and not the student).

By Momof2 (Momof2) on Tuesday, June 17, 2003 - 02:19 pm: Edit

At the very least, it should reduce loan amounts rather than other aid. We are hoping to have the excess from an outside scholarship credited to the "bursar account" that can be used for textbooks, etc. You are right, it would seem a shame to have wasted all that work and worry.

By Nymom (Nymom) on Tuesday, June 17, 2003 - 03:31 pm: Edit

Carlttt: you say the checks were made out to your daughter? Technically, that means she can use them for whatever she wants; thus, although they are labeled "scholarships" they seem more like prizes. You should check with the college finaid office; my guess is that they have very specific guidelines as to what must be reported.

By Emeraldkity4 (Emeraldkity4) on Tuesday, June 17, 2003 - 05:12 pm: Edit

However nymom, they would count as her income and need to be reported as such on her fin aid forms.( and on tax forms)
Some aid is specifically to be used for school expenses, however other awards may not specify and be open to interpretation.

By Nymom (Nymom) on Tuesday, June 17, 2003 - 06:51 pm: Edit

Oh, I see. But as income, it may not have as great an impact on her finaid as a deduction from her finaid, right? Or is 100% of a student's income expected to go towards tuition? Also, would the student be required to report it for tax purposes if she does not receive a 1099?

By Boysmom (Boysmom) on Wednesday, June 18, 2003 - 07:53 am: Edit

A gift is not taxable to the recipient.

By Emeraldkity4 (Emeraldkity4) on Wednesday, June 18, 2003 - 01:32 pm: Edit

Heres some info that may help with taxes
( or not I haven't really read it to see if it makes sense)


http://www.irs.gov/individuals/students/index.html

By Mesaman (Mesaman) on Tuesday, September 16, 2003 - 04:46 pm: Edit

Emeraldkity4 - you seem to be posted all over this board with lots of different info...I was doing some research on a company called Edifi and you were blasting that company....what is your area of expertise that allows you to weigh in on so many topics? Just curious...by the way, I've been to two different seminars by two different companies (Edifi and College Partners) and your posts earlier this year about Edifi were not very accurate....I thought they were very clear and went out of their way not to be high pressure. Seemed like a good service to me. You must not have ever gone to one of their seminars. Do you have "an axe to grind" with them? Just wanted to know.