Financial Aid Catch 22

Private scholarship providers (like the Sudbury Foundation) are often frustrated by the practice of  “displacement” or “substitution” by college financial aid offices who withdraw their need-based aid when students receive outside scholarships, like the Atkinson Scholarship. The truth is federal and state rules require colleges to do this.

Financial aid expert Mark Kantowitz explains it well and presents some worthwhile approaches to getting the most from an outside scholarship in this New York Times Q&A. His advice: Ask the university to increase the cost of attendance which in turn increases the calculated financial need which may enable the student to keep more aid.