 |
Private Scholarships: the Billion Dollar Rip-off!
Author: Reecy Aresty  | Posted: 05-04-2007 | Comments: 0 | Views: 34 | Rating: (60)  (?) 
 Towards the end of every school year, most non-profit organizations hold their Awards Banquets where worthy students are honored with various scholarships. Often, the names of recipients appear in the newspapers as an acknowledgment of all their hard work and dedication. Since the awarding organization is primarily giving the money to be used for the student’s education, they simply ask the family where the student will be attending, and parents, unaware of the pitfall, tell them. Virtually all such organizations are responsible for the fatal error of making the check payable to the student AND the college. So sets the stage for the billion dollar scholarship rip-off.
No, congratulations are not in order. In fact, pity the poor student who dedicated several years of blood, sweat and tears to the Red Cross, YMCA, Kiwanis, Rotary, or other such non-profit organization, only to see all of their well deserved scholarship money evaporate into thin air and wind up in the “scholarship fund” of their college of choice instead of their own financial aid packages.
Most schools send out their financial aid offers between January and April, with a May 1st decision date. As most colleges consider private scholarship awards a resource to help pay for a student’s education, they reduce their share of the student’s financial aid package dollar for dollar, and this is where the problem lies.
What a kick in the teeth it is for a family to read a revised award letter showing that the school’s portion of the financial aid was reduced by the amount of the private scholarship the student earned! The bad news is usually listed on the award letter as private scholarship, outside aid, or very often as other. Here’s a typical before and after scenario:
Before Receiving a Private Scholarship
$45,000 - Cost of Attendance (COA = tuition, fees, room & board, books, etc.)
$10,000 - Expected Family Contribution (EFC)*
$35,000 - Financial Need (FN = the maximum amount of aid a family will qualify for)
* EFC = the minimum the federal gov’t determines a family will pay at any college
We’ll assume the student qualifies for the following aid:
$ 3,500 - Stafford Loan
$ 4,000 - Perkins Loan
$ 2,500 - Federal work-study award
$ 3,000 - State grant
$22,000 - College scholarships, grants, tuition waivers, etc.
$35,000 - Total
The student will qualify for a maximum of $22,000/yr in financial aid from the college.
After Receiving a Private Scholarship:
$45,000 - Cost of Attendance (COA)
$10,000 - Expected Family Contribution (EFC)
$35,000 - Financial Need
The student qualifies for the following aid:
$ 3,500 - Stafford Loan
$ 4,000 - Perkins Loan
$ 2,500 - Federal work-study award
$ 3,000 - State grants, etc.
$10,000 - Private Scholarship
$12,000 - College scholarships, grants, tuition waivers, etc.
$35,000 - Total
While the student still qualifies for a maximum of $22,000/yr in financial aid from the college, the private scholarship has now become a bonus for the school, not the student. All of the student’s hard work actually saves the college money, and the benefit to the student is reduced to nothing!
It should be no great surprise to anyone that our greedy institutions of higher learning laid the groundwork for this clever thievery months in advance. Students who apply to any of the 225 elite private and state colleges that require the CSS Financial Aid Profile (FAP) are asked to indicate whether they expect to be scholarship recipients. Section SR, Question SR-150 asks for the dollar amount anticipated from student resources for school year 2007-2008, such as “grants, scholarships and fellowships,” and they must be listed individually in Section ES.
The majority of schools that only require the FAFSA (Free Application for Federal Student Aid), simply send out a questionnaire asking about private scholarships. They are less devious, but just as deft.
Who could imagine in their wildest dreams that colleges would stoop so low and play so dirty? Truth be told – and have no doubt about it - it’s all about the money. Every year there are billions of dollars awarded in private scholarships, and the beneficiaries of all the hard work that earned them is none other than our poor, starving institutions of higher learning, enriching their billion dollar endowment funds at the expense of their hard working, deserving students.
The best way for a family to avoid the injustice is to personally discuss this sordid state of affairs with the scholarship committee either at the time of application or well in advance of their award announcements. In that way, the check can be made payable to the parents instead of the student! If that fails, parents should ask them to postpone sending the check until after the student has enrolled.
As a last resort, have the parents call the college financial aid administrator, explain the situation, and kindly ask (grovel if you must), that because of all their hard work, the student is really entitled to the money and the college should not penalize them by reducing their aid by the amount of the scholarship. If they take a hard line, try to negotiate some of the money back into the student’s pocket, because half a loaf is better than none. Never lose sight of the fact that financial aid is a commodity, and like all commodities, it is negotiable!
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Source: http://www.articlesbase.com/college-and-university-articles/private-scholarships-the-billion-dollar-ripoff-127241.html
About the Author:Reecy Aresty has been a financial advisor since 1977, and is founder and president of College Assistance, Inc., located in Boca Raton, Florida. He is the author of "How To Pay For College Without Going Broke," an invaluable, critically acclaimed, parent/student manual, (updated from its previous edition, "Getting Into College And Paying for It!"). Arguably the most revealing book ever written on college admissions and financial aid, it is also the only book of its kind available in Spanish. For the past 28 years, Reecy has helped thousands of families send their kids to the college of their choice for less than they ever dreamed possible. For more information on admissions & financial aid, and to checkout the best college book on the market today, please visit: Paylessforcollege.com
|
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free! |
|
Related Articles
College Families Will be Overpaying Their Taxes – Again!
By: Reecy Aresty | 05/04/2007 | College and University
Families who made their best guess as to which of the Education Tax Incentives would save them the most on their income taxes, have put their 2007 tax returns to bed. However, for many, a sigh of relief is a bit premature. Countless families, even when assisted by professional tax preparers, chose incorrectly and will or have significantly overpaid the IRS – AGAIN!
Big World of Innovations
By: Peter | 26/06/2008 | Business Ideas
This article costs light upon new technologies and different kinds of tools.
Atlanta as a Place of Historical Events
By: Reese Patterson | 02/07/2008 | Art
This article is about Atlanta and exertions in the most interesting historical places there
History and Tsars of Moscow
By: Andre Davis | 09/07/2008 | Art
This article is about Moscow, its streets and history
How to Choose Student’s Insurance Plan
By: Fred | 14/02/2008 | Education
The biggest studying expenses are: tuition fee, book fee, accommodation, transportation, living expenses and medical insurance. The students have to draw up the medical insurance, as it is very important.
Loan Card Agencies Attract Students
By: Jason | 04/03/2008 | Education
This article tells about special loan agencies for young people, namely students. It as well tells how to get your first credit card and how to manage it.
Be Safe With Travel Medical Insurance
By: Donovan Stone | 11/03/2008 | Education
This article tells how indispensable travel medical insurance is and what it covers.
Cash Advance Loans
By: Jeffery Cooper | 14/03/2008 | Education
This article tells about the diversity of the loan offers and the bonus programs in this area.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
Who owns the ecpi college of technology?qt=t
By: brucek | 08-07-2008
Who owns the ecpi college of technology?qt=t
What was the first land-grant school in west ...
By: noel | 08-07-2008
what was the first land-grant school in west virginia?
My son wants to study at SDSU and he's now a ...
By: jannet | 08-07-2008
My son wants to study at SDSU and he's now a highschool senior...he wants to take up Education,and like how much do we need to prepare for his registration,books and other miscellaneous fees for one semester?
Memory tricks
By: tylersmom | 08-07-2008
anyone have any tricks on how to pass the memory portion of the postal exam
Commencement Protocol
By: Bob Shea | 07-07-2008
What is the appropriate Order of Procession for an academic commencement or Honors Convocation?
LEED Certifications
By: Deborah Mason | 07-07-2008
I'm looking for info on LEED/HERS certfications in Boston, Ma. that are reasonably priced.
Q&A Powered by: 
More from Reecy Aresty
College Families Bushwhacked by New Loan Legislation
By: Reecy Aresty | 10/06/2008 | College and University
Under the guise of aiding college families overwhelmed and victimized by the student loan crisis, The Ensuring Continued Access to Student Loans Act of 2008, not only fails its intended purpose, but actually is quite damaging to the very same students it intended to benefit. All it has done is add fuel to an ongoing fire by ensuring that colleges and lenders would benefit at the expense of students and their families…
Harvard’s 10% Financial Aid Policy Ain’t Necessarily so
By: Reecy Aresty | 19/05/2008 | College and University
Over the past ten years, Harvard’s grant appropriations have increased 143 percent, and in 2008 and beyond, more than 90 percent of Harvard families will qualify for what appears, on the surface, to be a most generous financial aid program. Fact is, Harvard has so much money it could actually pay the tuition for the entire student body for the next 100 years and still have billions of dollars left over! Nice, if you can get it...
The College Financial Aid Gift That Keeps on Giving
By: Reecy Aresty | 17/03/2008 | College and University
In the financial aid formulas, students have no asset protection allowance and lose 20 cents per year for every dollar in their name. Appearing asset poor can significantly help make sending a student to the college of their choice a financial reality. Gifting is one of the few legal ways this can be accomplished.
Secrets to Saving a Fortune on College Costs: What Divorced Women Need to Know
By: Reecy Aresty | 17/03/2008 | College and University
One of financial aid’s best kept secrets is the opportunity that arises when parents are separated or divorced and there’s a substantial difference on their balance sheets. When completing financial aid applications, only the designated custodial parent’s income and assets must be listed. Thus, the designation of custodial parent ultimately determines financial aid eligibility.
The College Loan Scandal – Evolution & Solution
By: Reecy Aresty | 11/06/2007 | College and University
What started out as informative Financial Aid Nights every fall and evolved into College Goal Sunday in January has now transformed itself into the largest student loan scandal in history!
How to Pay for College Without Going Broke
By: Reecy Aresty | 18/04/2007 | College and University
To ensure their children’s success in today’s intensively competitive world, parents are faced with the absolute necessity of paying for a college education. As students approach the high school years, it is understandable why so many parents feel the stress to financially prepare for tuition and related costs as they have not only gone through the roof already but continue to increase as much as 15% ever year! With no relief in sight, how can a college or college-bound family survive?
College Families Will be Overpaying Their Taxes – Again!
By: Reecy Aresty | 05/04/2007 | College and University
Families who made their best guess as to which of the Education Tax Incentives would save them the most on their income taxes, have put their 2007 tax returns to bed. However, for many, a sigh of relief is a bit premature. Countless families, even when assisted by professional tax preparers, chose incorrectly and will or have significantly overpaid the IRS – AGAIN!
Congress Extends Tax Deduction for Millions of College Families
By: Reecy Aresty | 05/04/2007 | College and University
Thanks to a last minute effort by Congress in December, President Bush extended the Tuition and Fees Deduction for one more year. However, while the opportunity has been viewed as a yearlong Christmas present for some of the 4.7 million families with students in college, for many – all that glitter won’t produce any gold!
|
|
Education 
