Billion Dollar Rip Off - Private Scholarships
Pity the poor student who dedicated several years of blood, sweat and tears to the Red Cross, YMCA, Kiwanis, Rotary, or any other non-profit organization, only to see all their well deserved scholarship money evaporate into thin air and wind up in the bank account of their alma mater. That's right! Virtually all organizations that award students private scholarships make a fatal error in having the check made payable to the student and the college. In that way the colleges consider it a resource to help pay for a student's education.
By the end of the school year most awards banquets are held, and worthy students are honored with these various scholarships. Very often their name appears in the paper as a recipient for all their hard work and dedication. Since the organization is primarily giving this money to be used for a student's education, they innocently ask the family where the student will be attending, and make out the check to both parties.
Most schools send out their financial aid offers between January and April, with a May 1st decision date. Now, enter the "poor" institutions of higher learning. What a kick in the teeth it is to find out when a revised award letter arrives, that the school's aid has now been reduced dollar for dollar, based on the amount scholarship received! It's usually listed as "private scholarship," "outside aid," or very often, "other."
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But these greedy schools already laid the groundwork for this theft months earlier. Those students who applied to any of the 225 elite private and state colleges that require the CSS Financial Aid Profile financial aid form may have already indicated they would be scholarship recipients. Section F, Question 26i asks for the dollar amount expected from student resources for the school year such as "grants, scholarships, fellowships, etc," and they must be listed individually in Section P.
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're less devious, but just as deft.
Who in their wildest dreams would have ever thought that colleges would stoop so low and play such a dirty trick? Truth be told; it's all about the money, and have no doubt about it. Every year there are billions awarded in private scholarships, and who benefits; none other than these "poor" institutions of higher learning enriching their billion dollar endowment funds at the cost of their deserving students.
The best way for a family to avoid this catastrophe 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 announcing the awards. In that way, the check can be made payable to the parents instead of the student! If that tactic fails, ask them to postpone sending the check until after the student has enrolled.
If all else fails, have the parents call the 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 reduce 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!
Reecy Aresty, a financial advisor since 1977, is the author of Getting Into College And Paying For It, an indispensable parent/student manual, the only book of its kind available in Spanish. For the past 25 years he's helped thousands of families send their kids to the college of their choice for less than they ever dreamed possible. His book is guaranteed to give students that all-important edge in admissions, and for parents there are numerous legal strategies to drastically cut the cost of college. Go to www.paylessforcollege.com for a free report, The College Funding Timeline, and learn what parents, students, and the media are saying about Reecy and his book for all seasons.
