Saving for College
Scholarships May Not Reduce Costs
“Outside” scholarships scholarships awarded by organizations not affiliated with a particular school can lower total college costs, but in some cases outside scholarships may not result in a lower total cost. Under federal guidelines, outside scholarship funds can be considered as a family resource when financial aid needs are calculated. In that case scholarship funds do not get applied to your expected family contribution, meaning the grant from the school could be reduced.
Of course, if you didn't expect to qualify for financial aid there is no impact (other than on how much you will have to pay), and if you plan to take loans, scholarships can reduce the amount you have to borrow.