what happens if you win a scholarship

What happens if you win more scholarships than you need?

You’ve won a bunch of scholarships, now what? How do colleges disburse your aid, and if you have more than you need, where does it go?

David Coven

Graduating from the University of Washington’s Mechanical Engineering program, he helped revolutionize energy at Tesla, transportation at Hyperloop, and the aerospace industry at Boeing.

David Coven

You’ve won a bunch of scholarships, now what? How do colleges disburse your aid, and if you have more than you need, where does it go? Below we hope to answer all this and more!

Each college has a Cost of Attendance (COA), this is all of your mandatory fee’s like tuition, books, course fees, etc.; and your non-mandatory fees like housing and food. Essentially your full, yearly cost of college.

The COA is your upper bound of aid, meaning that the school you attend cannot award you more than your COA, no matter how many scholarships you win.

So, if you win $30k and your school cost $25k, then $25k is applied to the account, and the rest is typically sent back to the scholarship organization. If you’re in this case make sure to talk to your financial aid officer, they may be able to swing it so that your aid is split over the years/semesters so you can utilize as much of the money as possible.

Now that you’ve won money for the year, what happens to any left over?

Say your mandatory fees are $18k and your non-mandatory fees are $9k and you’ve won all $27k, how does it break down? If the money is being sent to the University directly, then it will be applied to your mandatory fees first. The school will pay itself the $18k and then the difference will be sent to you as a refund. This is for you to use how you see fit, though most scholarships expect you’re using it on things like housing, transportation, books, and things of that nature. Some scholarships can only be applied to mandatory fees like tuition, so watch out for this when you’re tallying your total.

Now, if the scholarship money is sent directly to you, then you can, in theory, be awarded more than your COA. This is a very rare occurrence but can happen.

There are some ways to artificially increase your COA and let some of your excess scholarships in. Some financial aid officers will allow you to include things like a computer expense to your COA statement. While most times this is covered by a school-sponsored loan, if you have extra scholarships, you may be allowed to let them fill this spot. Depending on the University, you can only do this once or twice, but it’s an excellent way to use that excess scholarship to get something useful.

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I went through this when I went to UW a few years ago. I won enough scholarships for a full ride and each quarter after tuition/fees were paid, UW cut me a check for

$3k. I saved a bunch, used it for housing and food, and what not. I ultimately had to reject a few scholarships because I couldn’t use them and had the latter years paid for.

Before you reject any award, make sure you’ve talked to your financial aid officers and have tried every possible way to use your aid. The last place you want to be is in need after turning down potential money.

Where does this leave us?

It all depends. Do you have excess relative to your mandatory fees? Then you get a refund. Do you have excess relative to your COA? Then you go to the aid office and try to increase your COA, or split it over additional years/semesters. If that’s maxed out, congrats, enjoy! 😀

There is a caveat here; if you have excess and not all of your aid is comprised of outside scholarships.

If you have a combination of work study, grants, loans, university scholarships, and outside scholarships, then things change. As you get new scholarships, the University will begin to replace the aid you already have. They’ll do this in order of loans > work study > grants > university scholarships.

So if you have $1,500 in loans and win a $1,500 scholarship, they’ll tend to reduce your loan amount by $1,500.

While it feels like there is no change to your net aid, you do have the benefit of fewer loans. The intention here is to reduce your reliance on aid that they can distribute to other students. With an understanding of what happens to leftover aid, we can maximize our pursuit to win as many scholarships as possible! And that’s where Scholarship Junkies comes in!

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At Scholarship Junkies we’re here to make sure you have all the help you need to find, apply to, and win as many scholarships as possible!

We take insight from experts who’ve won millions of dollars in scholarships and help you transform your writing into a story that stands out. In just a few days, you can take your writing to the next level completely for free.

We also match you with scholarships that fit you, so you never have to worry about ads or endless sweepstakes. And if you can’t find a scholarship, let us know, and we’ll find one for you!

What are you waiting for? Let’s get started!

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You’ve won a bunch of scholarships, now what? How do colleges disburse your aid, and if you have more than you need, where does it go?

What Happens to Unused Scholarship Money?

by Staff Author · Published August 23, 2019 · Updated December 4, 2019

Obtaining a college degree is a huge cost that can set students back thousands of dollars. For most students, winning a scholarship is a dream. It provides a major relief from figuring out how to pay for college.

As difficult as it may be to win a scholarship, some students win even more scholarship money than they end up needing.

Why Isn’t Scholarship Money Used?

There are several reasons why a student may no longer need the scholarship money they have won.

One reason is that they miscalculated the amount of financial aid that they need. They applied and won several scholarships and end up having leftover money

This could also happen if a student enrolled to study at a private school but end up choosing to study at a public school.

What Happens to Unused Scholarship Money?

If you are in the position where you no longer need your scholarship money you should take several important steps. These steps assure that your money gets used in the best way possible. It also prevents you from facing consequences for holding onto the leftover money.

Contact the Scholarship Committee

If you have unused scholarship money, you must contact the scholarship provider. They will be able to help you deal with the unused money in the best way possible.

Scholarship committees may differ in the way that they handle unused scholarship money. You can contact them by writing an email or calling them to explain your situation.

Scholarship providers generally send your scholarship money to your school. This means that you also need to contact the financial aid office at your school and let them know about the changes.

Returning the Funds

Unfortunately, you won’t be able to use the money for other things. Your scholarship binds you to a contract. The contract has rules regarding how you may use the scholarship money.

Most scholarship money must be used towards educational purposes only. Using the money in a way that goes against your contract can end up getting you in trouble. The scholarship provider may even choose to take action against you in court. You will have to pay back the money you spent.

If you return the funds to the provider, they will be able to transfer the money to another student in need. If you intend to use the funds at a later time towards your education, talk to the scholarship committee. They may allow you to hang onto the funds. Then, when you’re ready, you can use the money.

Paying Taxes

When you win a scholarship, the IRS generally doesn’t require you to pay taxes on your scholarship money.

To get your scholarship money tax free, you must be studying at an educational institution that has a faculty and curriculum.

You must use the scholarship money for tuition, fees, books, supplies, and any other necessary equipment for your studies.

When you have leftover scholarship money that you can’t use towards your education, you should report the scholarship money as a taxable income. If you can’t find a way to use it towards your education, then the best thing for you to do is to return it.

This can help another student in need. If you know that you might need the money later on for your education, discuss this possibility with the scholarship provider.

If you have leftover scholarship money, consider yourself very lucky. Most students apply to many scholarships, hoping to win at least one. To have too much scholarship money is definitely a good (and manageable) problem to have

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What happens to unused scholarship money? Find out everything about why it happens and what to do about it if it happens to you