FAQ - Scholarship

The following are some of the most frequently asked questions relating to scholarships.

What is the difference between a lottery scholarship and a merit scholarship?

Students who receive merit-based scholarships typically have exceptional grades, test scores, and have actively participated in community service and extracurricular activities. Students who receive lottery scholarships are randomly selected, so everyone applying has a good chance of obtaining a scholarship.

What are my chances of receiving a scholarship?

It depends on the type of scholarship, applicant qualifications, personal statements, and the overall quality of the application. You'll enhance your chances when applying for scholarships you qualify for and finding ones designed for specific groups you're affiliated with, such as school organizations, religious organizations, ethnic groups, etc. When a lot of students apply for the same scholarship, chances of receiving the award diminish. Apply for scholarships specific to academic fields or areas you plan to pursue in your future career since scholarship committees typically look favorably upon it. Remember, finding and applying for scholarships is time consuming and hard work, so be prepared to devote a lot of time and effort to the application process.

How does community service increase my chances for receiving a scholarship?

You will more than likely be asked about your participation with community service on every application form you complete. When many qualified applicants apply for the same scholarship, you can set yourself apart from the competition by being actively involved in your community. In fact, organizations offering scholarships often prefer applicants who've participated in community service since they want to assist students intending to actively help others and improve their communities.

Who should I ask to write my letter of recommendation?

You should seek letters of recommendations from teachers, coaches, advisors, managers, or anyone else who has mentored or supervised you. It's inadvisable to seek a recommendation from a family member or friend. Letters of recommendation are endorsements of qualifications and abilities, so seek people who can honestly verify your personal achievements and strengths.

If the required G.P.A. is 3.8 and I have a 3.7, should I still apply?

Do not apply if your numbers are below the specified requirements. Thousands of students typically apply for the same scholarships, so applicants not satisfying the requirements are often not considered.

How quickly will I be notified?

It usually takes a few weeks after your application is reviewed. However, it differs by scholarship.

How does the scholarship provider choose a winner?

Every organization offering scholarships has different criteria when making award decisions. Students receiving awards typically satisfy all scholarship requirements, and they typically separate themselves from other applicants in personal essays. When reviewing application forms, pay close attention to instructions to determine what providers are specifically seeking in applicants.

Does the amount I receive in scholarships affect my eligibility for financial aid?

It typically does. Organizations sponsoring scholarships usually transfer funds to schools, and financial aid departments cover unpaid tuition fees with these funds. After receiving a scholarship, you might be limited to how many other forms of financial aid you qualify for.

 I probably don't qualify for aid. Should I apply for aid anyway?

Yes. Many families mistakenly think they don't qualify for aid and prevent themselves from receiving financial aid by failing to apply for it. In addition, there are a few sources of aid such as unsubsidized Stafford and PLUS loans that are available regardless of need. The FAFSA form is free. There is no good excuse for not applying.

Do I need to be admitted before I can apply for financial aid at a particular university?

No. You can apply for financial aid any time after October 1. To actually receive funds, however, you must be admitted and enrolled at the university.

Why can't I submit my financial aid application before October 1?

You cannot submit the form before this deadline because the need analysis process uses your financial information from the prior tax year when calculating eligibility for the upcoming award year

Do I have to reapply for financial aid every year?

Yes. Most financial aid offices require that you apply for financial aid every year. If your financial circumstances change, you may get more or less aid. After your first year you will receive a "Renewal Application" which contains preprinted information from the previous year's FAFSA. Note that your eligibility for financial aid may change significantly, especially if you have a different number of family members in college. Renewal of your financial aid package also depends on your making satisfactory academic progress toward a degree, such as earning a minimum number of credits and achieving a minimum GPA.

How do I apply for a Pell Grant and other types of need-based aid?

Submit a FAFSA. To indicate interest in student employment, student loans and parent loans, you should check the appropriate boxes. Checking these boxes does not commit you to accepting these types of aid. You will have the opportunity to accept or decline each part of your aid package later. Leaving these boxes unchecked will not increase the amount of grants you receive.

Are my parents responsible for my educational loans?

No. Parents are, however, responsible for the Federal PLUS loans. Parents will only be responsible for your educational loans if they co-sign your loan. In general you and you alone are responsible for repaying your educational loans.

You do not need to get your parents to cosign your federal student loans, even if you are under age 18, as the 'defense of infancy' does not apply to federal student loans. (The defense of infancy presumes that a minor is not able to enter into contracts, and considers any such contract to be void. There is an explicit exemption to this principle in the Higher Education Act with regard to federal student loans.) However, lenders may require a cosigner on private student loans if your credit history is insufficient or if you are underage. In fact, many private student loan programs are not available to students under age 18 because of the defense of infancy.

If your parents (or grandparents) want to help pay off your loan, you can have your billing statements sent to their address. Likewise, if your lender or loan servicer provides an electronic payment service, where the monthly payments are automatically deducted from a bank account, your parents can agree to have the payments deducted from their account. But your parents are under no obligation to repay your loans. If they forget to pay the bill on time or decide to cancel the electronic payment agreement, you will be held responsible for the payments, not them.

Why is the family contribution listed on the SAR different from the family contribution expected by the university?

The federal formula for computing the expected family contribution is different from those used by many universities. In particular, the federal formula does not consider home equity as part of the assets.

 If I take a leave of absence, do I have to start repaying my loans?

Not immediately. The subsidized Stafford loan has a grace period of 6 months and the Perkins loan a grace period of 9 months before the student must begin repaying the loan. When you take a leave of absence you will not have to repay your loan until the grace period is used up. If you use up the grace period, however, when you graduate you will have to begin repaying your loan immediately. It is possible to request an extension to the grace period, but this must be done before the grace period is used up.

If your grace period has run out in the middle of your leave of absence, you will have to start making payments on your student loans.

I got an outside scholarship. Should I report it to the financial aid office?

Yes. If you are receiving any kind of financial aid from university or government sources, you must report the scholarship to the financial aid office.

Unfortunately, the university will adjust your financial aid package to compensate. Nevertheless, the outside scholarship will have some beneficial effects. At some universities outside scholarships are used to reduce the self-help level. For example, at MIT the outside scholarship is first applied to reducing the self-help level, and only when the scholarship exceeds self-help does it replace institutional grants. At other universities outside scholarships are used to replace loans instead of grants.

What are GATE loans, and why doesn't my university participate?

GATE loans is a nonprofit private loan program (Guaranteed Access to Education) offered through participating schools in conjunction with Bank of America and the National Collegiate Trust (NCT). There is a minimal credit check (no FICO score or cosigner requirement) and schools can recommend whatever loan amount they'd like the student to receive. The interest rates range from LIBOR + 2.35% to LIBOR + 8.85%, with fees of 0% to 9%. The loan term is 13 to 20 years. The GATE loan program has been suspended effective June 15, 2008.

If this program is so wonderful -- no loan limit, no credit check, low interest rate -- why don't more schools participate? There are several reasons why a university might not want to participate in this program:

There is some risk-sharing by the schools. As a result, the program will be most attractive to schools with a low default rate.

There are no federal guidelines or regulations governing this loan program.

Membership is not open to two-year colleges.

Universities that are interested in participating in the GATE loan program should call 1-800-895-GATE (4283).

Where can I get information about Federal student financial aid?

Call the Federal Student Aid Information Center (FSAIC) at 1-800-4-FED-AID (1-800-433-3243) or 1-800-730-8913 (if hearing impaired) and ask for a free copy of The Student Guide: Financial Aid from the US Department of Education. This toll free hotline is run by the US Department of Education and can answer questions about federal and state student aid programs and applications. You can also write to

Federal Student Aid Information Center
PO Box 84
Washington, DC 20044

Are work-study earnings taxable?

The money you earn from Federal Work-Study is generally subject to federal and state income tax, but exempt from FICA taxes (provided you are enrolled full time and work less than half-time).

Federal Work-Study earnings during the calendar year should be included in the totals for AGI and Worksheet C on the FAFSA. Work-study earnings should only be included in Worksheet C when they represent financial aid to the student, since the answer to this question is used as an exclusion from taxed income. The student should also be careful to report amounts based on the calendar year, not the school year.

 Is it legal for a 17-year-old student to sign a promissory note for a student loan, even though the student has not yet reached the age of majority?

Normally, a minor cannot be held liable for a contract that they sign. However, in 1992 the Higher Education Act was amended to permit eligible students, defined as per Title IV regulations, to sign promissory notes for their own Federal student loans. As such, student loans represent one of the few exceptions to the so-called "defense of infancy". The specific citation is section 484A(b)(2) of the Higher Education Act of 1965 (20 USC 1091a(b)(2)), and applies to Stafford, PLUS and Consolidation Loans. It does not appear to apply to Perkins and Direct Loans, although it was clearly the intent of Congress that it should.

Several states have also passed similar laws that consider minors to be competent to enter into a contract for an education loan. This extends similar protection to private and non-federal loans. All private education loans require a cosigner when the student is under the age of majority, just to be safe.

FAFSA Questions

Where can I get a copy of the FAFSA?

You can ask your guidance counselor for a copy. You can also get the FAFSA from the financial aid office at a local college, your local public library, or by calling 1-800-4-FED-AID. The online version of the form is available at http://www.fafsa.ed.gov.

Are photocopies of the FAFSA acceptable?

No. Only the original FAFSA form produced by the US Department of Education is acceptable. Photocopies, reproductions, facsimiles and electronic versions are all not acceptable. (See DCL GEN-95-21.)

How soon after October 1 should the FAFSA form be sent in? Is it better to wait until the income tax forms have been completed?

Send in the form as soon as possible after October 1. Do not wait until your taxes are done. Although it is better to do your taxes early, it is ok to use estimates of your income, so long as they aren't very far off from the actual values. You will have an opportunity to correct any errors later. If you wait too long, you might miss the deadline for state aid. Most states require the FAFSA to be submitted by March 1, and some even as early as early or mid-February.

I sent in my FAFSA over four weeks ago but haven't heard anything. What should I do?

If you haven't received a Student Aid Report (SAR), call the Federal Student Aid Information Center at 1-800-4-FED-AID (toll free) or 1-319-337-5665. You must provide them with your Social Security number and date of birth as verification.

You can also write to

Federal Student Aid Programs
PO Box 4038
Washington, DC 52243-4038

to find out whether your FAFSA has been processed or to request a duplicate copy of your SAR.

 I was born on January 1, when I will be 24 years old. Can I check Yes in the answer to the FAFSA question "Were you born before January 1, ..." to qualify as an independent student?

The official answer is no. If you check yes, your SAR will be flagged for verification. However, most financial aid administrators would use professional judgment to override the default dependency determination for a student born on January 1 who also demonstrates financial self-sufficiency.

6. What do those acronyms on the Student Aid Report (SAR) mean?

The acronyms on the bottom of the SAR represent intermediate results in the need analysis. To fully understand their meaning, you will need to be familiar with the federal need analysis methodology, such as is used by the EFC Estimator. The meanings of the acronyms are as follows:

EFC	Expected Family Contribution
TI	Total Income
ATI	Allowances Against Total Income
STX	State and Other Tax Allowance
EA	Employment Allowance
IPA	Income Protection Allowance
AI
CAI	Contribution from Available Income (Independent Student)
DNW	Discretionary Net Worth
APA	Education Savings and Asset Protection Allowance
PCA	Parents' Contribution from Assets
AAI	Adjusted Available Income
TPC	Total Parents' Contribution
TSC	Total Student's Contribution
PC	Parents' Contribution
SIC	Dependent Student's Income Contribution
SCA	Dependent Student's Contribution from Assets

If an asterisk appears next to the EFC figure, the student has been selected for verification. The asterisk is followed by a code that explains the reason why the student was selected for verification. The letter explains the reason for selection, and the number indicates the priority, with code 1 the highest priority and code 25 the lowest priority (although there are higher codes).

For additional details about SARs and ISIRs, please see the Guide to 1997-98 SARs and ISIRs.

7. I qualify for the Simplified Needs Test. Should I fill out Section G anyway?

Yes. Some states and most private colleges require the asset information in Section G to compute their own financial aid awards. Including this information will not affect your eligibility for federal financial aid (it is disregarded by the Federal Need Analysis Methodology if you qualify for the Simplified Needs Test). Even if none of the schools require the information, you should include it anyway, just in case.

Home Schooling and Financial Aid

 Are there any programs that provide student financial assistance to homeschooled children?

Homeschooled students are eligible for federal student aid for college if they have "completed a secondary school education in a home school setting that is treated as a home school or private school under State law" (Section 484(d)(3) of the Higher Education Act of 1965). Homeschooled students have not been required to take the GED or take an ability-to-benefit test since the Higher Education Amendments of 1998. High school dropouts must take a GED exam or an ability-to-benefit test, but students who have completed a home schooled secondary education that satisfies the requirements of state law do not. For additional information, see Federal Requirements for Homeschoolers Seeking College Admission and Financial Aid, Home School Legal Defense Association (HSLDA), May 2003.

Many private scholarships are open to homeschooled students. Some scholarships, however, require a high school diploma or GED. If a scholarship requires a high school diploma or GED, ask for a clarification or exception before applying. If you encounter resistance, it can help to point out that in 2005 the winner of the Siemens Westinghouse Competition in Math, Science and Technology's $100,000 scholarship was a 16-year-old homeschooled student.

There aren't many scholarships specifically targeted at homeschooled students, other than those sponsored by the Home School Foundation.

Divorce and Financial Aid

An entire section of FinAid is devoted to the topic of Divorce and Financial Aid. It discusses which parent is responsible for completing the FAFSA, the obligations of non-custodial parents to pay for college, college support agreements, the obligations of step-parents, and the ability of non-custodial parents to take advantage of the various tax benefits for education.

Bankruptcy and Financial Aid

An entire section of FinAid is devoted to the topic of Bankruptcy and Financial Aid. It discusses both whether student loans can be discharged by bankruptcy, as well as the impact of a bankruptcy on eligibility for student aid.