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?
A
The college automatically increases federal grant aid to match the private scholarship.
B
The college reduces the student's need-based aid (often loans or work-study) because the scholarship fills part of their demonstrated need.
C
The private scholarship replaces the student's entire tuition cost, regardless of other aid.
D
The college charges an administrative fee for processing the external scholarship.
✓ Correct Answer: Option B
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.
💡 Why is B) the correct answer?
The correct answer to the question "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?" is Option B: The college reduces the student's need-based aid (often loans or work-study) because the scholarship fills part of their demonstrated need..
The other options — A) The college automatically increases federal grant aid to match the private scholarship., C) The private scholarship replaces the student's entire tuition cost, regardless of other aid., D) The college charges an administrative fee for processing the external scholarship. — are incorrect for this College Advising question. As explained above: 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 scholar…
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