A student receives a large private scholarship after their financial aid package has already been awarded by their college. What is 'scholarship displacement' and how might it impact this student's aid?

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B) The college reduces the student's need-based aid (often loans or work-study) because the scholarship fills part of their demonstrated need.. Scholarship displacement occurs when an institution reduces a student's existing financial aid package (often loans, work-study, or even institutional grants) because they received an outside scholarship. The scholarship fills part of their unmet need, reducing the amount the institution needs to provide.

A student receives a large private scholarship after their financial aid package has already been awarded by their college. What is 'scholarship displacement' and how might it impact this student's aid?

✓ Correct Answer: Option B

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