How Scholarships Affect Financial Aid!


“I will go wherever the truth leads me. It is secular scholarship, Rebbe; it is not the scholarship of tradition. In secular scholarship there are no boundaries and no permanently fixed views.”
Lurie, if the Torah cannot go out into your world of scholarship and return stronger, then we are all fools and charlatans. I have faith in the Torah. I am not afraid of truth.”
― Chaim Potok, In the Beginning 

The rising cost of education in today’s culture has made it harder for students to pursue higher education. Scholarships have evolved into an essential source of financial assistance for many deserving students in order to lessen this load. Although scholarships unquestionably help students out financially, it’s crucial to comprehend how they affect other financial aid options. In this essay, the impact of scholarships on government grants, loans, and work-study programs is examined, along with the implications for students’ access to financial aid as a whole.

  1. Scholarships and Financial Aid in Relationship: Scholarships are a non-repayable form of financial help that are frequently given out in accordance with academic performance, extracurricular engagement, or certain skills. On the other hand, financial aid covers a wider range of financial aid, including as grants, loans, and work-study programs that can be both need- and merit-based. Although scholarships are a form of financial help, their effects on other types of aid might differ based on federal legislation and the policies of educational institutions.
  2. Financial aid based on need is affected by: The distribution of monies in need-based financial aid packages may be impacted by scholarships. A scholarship is seen as a financial resource that can lessen a student’s demonstrated financial need when they are awarded one. Some universities may therefore make adjustments to the need-based aid package to reflect the scholarship cash received. The student’s grants or work-study monies may be reduced as part of this adjustment. As a result, scholarships may have an indirect impact on the total amount of financial aid by changing how need-based aid is distributed.
  3. Effect on Merit-Based Financial Aid: Merit-based financial aid programs are intended to recognize and reward extraordinary skill or accomplishments, and are frequently provided based on academic or athletic achievements. Scholarships falling under this category may not be based on financial need and may have varied effects on aid packages. Since merit scholarships are frequently given in addition to need-based aid, they tend to increase the total amount of financial help that the student is eligible for. Without altering the need-based elements of a financial aid package, merit scholarships can add another layer of financial assistance.
  4. Effect on Federal Grants and Loans: Scholarships may have an impact on how federal grants and loans are allocated. Federal awards like the Pell Grant, Supplemental Educational Opportunity Grant (SEOG), and Federal Supplemental Educational Opportunity Grant (FSEOG) eligibility is determined through the Free Application for Federal Student Aid (FAFSA). Scholarships may be treated as income on the FAFSA, which may lower a student’s eligibility for need-based federal assistance. Furthermore, the distribution of federal loans may be impacted by scholarships. When determining loan eligibility, the entire financial aid package—including scholarships- is taken into account. The amount of a student’s loan may be lowered if their total financial aid is more than the cost of attendance. Taking into account the money the student receives from scholarships; this reduction makes sure they aren’t receiving too much financial aid.
  5. Scholarships and Work-Study Programs: Work-study programs give students the chance to make money through part-time employment, frequently on campus. Work-study programs can be impacted by scholarships since they change how the student’s financial need is determined. Scholarships can lower a student’s documented financial need, in which case the amount of work-study money provided may be changed to reflect this. Scholarships do not, in general, completely replace work-study opportunities since they provide students with both essential financial aid and worthwhile experiential learning opportunities.

Scholarships are essential for helping students who want to pursue higher education with their finances. It’s crucial to understand how they affect other types of financial aid, though. By lowering demonstrated financial need, scholarships can affect need-based financial assistance packages, potentially affecting grants and work-study awards. Merit-based scholarships, on the other hand, frequently improve the total amount of financial aid without reducing the need-based components. Furthermore, scholarships may change a student’s eligibility and loan amount when it comes to receiving federal grants and loans. While scholarships are valuable tools for students, knowing how they affect financial aid can help them make wise selections and efficiently organize their financial support for their education.

Sangatee Goutom
Ever since I read Jane Austen's "Pride and Prejudice" , I knew books were my thing (and still are). Hello, I am Sangatee Goutom, a 3rd year Bachelor student majoring in English Literature. I am 21 years old, and along the path, I have learned lots of new things, and took up a keen a passion for writing, and doing research work. I hope to one day inspire others to take up this path. I am still exploring horizons, but cheers to the life full of ups, and downs.


Please enter your comment!
Please enter your name here