Receiving a scholarship is a great feeling. Applying for scholarships, meeting the application requirements, and having your efforts pay off with financial gain are all very rewarding. College is expensive, and having help to pay the bills is always welcome. If you have extra scholarship money, you may wrestle with the idea of keeping the extra money or using it to pay bills and non-college expenses. But how do you know if this is allowed?
The answer depends on where the scholarship money came from.
In the case of scholarships, the money rarely goes to the student, but directly to the university. This means if your scholarship is more than your cost of attendance, the money is not given directly to the student. What happens then depends on your financial aid situation. If your scholarship funds exceed your costs, the university might reduce the amount of provided loans and work study.
This can help you lower student loans and reduce the time you spend away from studying, which have their advantages. If you’re living on campus and room and board is handled through the university, these costs may be covered by the scholarship as well. Living on campus can be expensive, but it’s necessary for those traveling far from home, so any chance to cover the cost is a welcome one.
If you need to use the extra scholarship money for other types of bills, contact the scholarship provider to learn their policy on the money. For some, you can only use the money for educational costs; for others, you can use it however you want.
Another possibility for handling excess scholarship money is to speak with the financial aid office to see if they can defer scholarship funds from one year to the next. This is especially useful if the university wants to cut grant money instead of money from student loans. Loans need to be paid back, grants and scholarships don’t.
Once you’ve won a scholarship, you are required to report it to the college you plan to attend. The school then reassesses the financial aid package. Basically, when a student wins a scholarship, they become less “needy,” which means they do not need as much financial aid. Usually, a school will first subtract funds from the student loan component of the package, leaving any grant or work-study money alone. However, students should always clarify with the school when they report a scholarship that they would like student loans removed from the package first.
The bottom line, however, is that you, as a student, will not receive the money as a refund. Financial aid refunds are returned to the student through various means, since financial aid is considered income for purposes of taxes and it’s your money anyway. Scholarship money isn’t part of this though. Refunds take into account tuition, computer lab fees, room and board handled through the university, and potentially even parking costs. Anything left over goes back to the student, so make sure to spend it wisely, especially if you live off campus.
Earning a scholarship is a great achievement. The chance to earn awards to pay for college without having to take on loans can make a huge different for years to come. By using your scholarship funds wisely, you’ll graduate with as little or no debt as possible.