College Scholarships and Award Displacement

How to Avoid “Award Displacement” When you win College Scholarships

It’s clear that many students in the U.S. rely on scholarship awards to attain an education.  But, do you know that getting an external scholarship or outside funding could lead to a reduction of the financial aid you receive from your college? It’s called “award displacement.”    

We have put together some tips on how you can avoid award displacement when you win college scholarships. With this in mind, we end by looking at whether it is still advisable to apply for a scholarship if you have already received funding from your college or the government. 

About Award Displacement

Your college is required by federal law to reduce the amount of need-based aid awarded to you whenever an outside scholarship or funding you receive reaches a certain threshold. The threshold can be as low as $300 above your estimated need. 

You are also required by law to report all outside scholarships or funding to your college. Failure to do this will result in what is called an “overaward,” which is money you have to pay back.

When you report an outside scholarship to your college, it could result in a scholarship displacement or award displacement. This is when a student has their financial aid cut down to make up for the reduced need incurred from being awarded an outside scholarship. 

For example, if you receive $750 from an outside scholarship, $750 could be deducted from the financial aid you are eligible for. This is because your estimated need has gone down by $750.  

Understand How Financial Aid Works


Savings for education. Hands are counting money.

Understanding how to avoid an award displacement requires an appreciation of how financial aid works. Financial aid is not restricted to federal grants and loans. It includes state grants, school-based grants, work-study income, and outside scholarships. 

The financial aid you’re eligible for is based on a complicated formula. It can be summarized in two key variables: your expected family contribution (EFC) and your school’s cost of attendance (COA). When your EFC is deducted from your COA, the amount arrived at is the financial aid you’re eligible for (Source). 

However, it is not as simple as just subtracting the EFC from the COA. Many students often find themselves having a higher EFC than they can afford. This is because schools use different estimations when they determine the EFC or the COA. Thus, you will need to take some time to familiarize yourself with how financial aid works.   

Be Clear About Your College Policy on Outside Scholarships

To avoid getting your financial aid cut for receiving an outside scholarship, you need to be clear about the scholarship policy of the college you are enrolled in. Deciding what to cut is at the discretion of the college. Some reduce your college grant, and others may decide to cut the amount of your loan. The latter is advantageous because it replaces your loan (which you have to pay back) with a scholarship (which you don’t have to pay back). Some colleges may roll over your scholarship to the next semester. 

It’s essential to know how each college you are applying to addresses issues of outside scholarships. Be clear about what costs (loans, books, or room and board) you can offset with your outside scholarships.

But what if a particular college doesn’t state its award displacement policy? Then you are better off contacting the school’s financial aid office to get more information. It’s better to be clear about these issues right from the beginning than being shocked when you discover that you now owe more because you got extra assistance.

Be Careful With Side Gigs

According to a report by the U.S. Census Bureau, 71% of all U.S. undergraduates in 2011 worked a part-time job. Around 20% of these students worked an average of 35 hours each week. While this may look like a responsible thing to do, it may haunt you later (Source). 

Students who work while also attending college may be putting their financial aid at risk. Because it’s a need-based system, financial aid relies on your capacity to afford an education in determining how much you are eligible for.

When you apply for financial aid, you submit information about your income and that of your parents’ or guardians’. This information is used by the Department of Education and your school to determine how much financial aid you need. If a student has a side job, they are assessed to have less financial need than students who do not. 

Apart from issues linked with financial aid, overworking while you are still in college could have a detrimental effect on your studies. For instance, the American Association of University Professors, says that students who work between 10 to 15 hours a week are likely to have more success in their studies than students who don’t work at all, and those who work more than 15 hours a week (Source). 

It is advisable to limit the amount of time you spend working to avoid a situation that could lead to you potentially losing your financial aid due to work.

Seek Assistance from the Scholarship Provider

Suppose you are at risk of having your financial aid reduced because of a private scholarship, ask your scholarship provider for help. Most scholarship providers have the power to influence your school’s decision on your financial aid. The scholarship provider can leverage the amount of aid they provide to your school to get favorable conditions for students they sponsor. 

You may be required to sign the Family Educational Rights and Privacy Act (FERPA) waiver to enable your provider to mediate with the school on your behalf.

Your provider may come to an arrangement that would have your school lower your student loans before they can start looking at changing the institutional grant or scholarship funds available to you. 

Should you Still Apply for Private Scholarships?

At this point, you may be wondering whether it is still a good idea to apply for external or private scholarships. The short answer is yes, you should. Even though the caveats that come with private scholarships seem innumerable, such scholarships are still free money that you otherwise wouldn’t have.

It is also advisable to apply for federal student loans as your scholarships wouldn’t likely be enough to cover the cost of your education. On top of this, you may still need to seek private sponsorship as scholarships, and federal loans have their limits. 

It’s essential to do the math and ensure that your federal and private financial aid works to your advantage at the end of the day. Whatever you eventually owe by the time you graduate, remember that you can still apply for student loan forgiveness or loan consolidation to manage your finances better. 

Notwithstanding its name, had nothing to do with school soup. It was a website that described its core business as providing a “comprehensive scholarship database and information about colleges, online degree programs, and career schools” (Source). 


So, what was the word soup doing in the name of an organization that listed scholarships? The answer can be found in one of the company’s press releases: “Like any great soup recipe, we can only give the basic ingredients, such as thousands of suitable scholarship matches. It’s up to the student to add the water and stir. That means turning up the heat and actually applying for all of those scholarship matches” (Source). 


At the height of its popularity, SchoolSoup was acquired by GoodCall. GoodCall calls itself “a consumer-focused education and personal finance website.” At the time of the acquisition, SchoolSoup claimed that 700,000 students relied on its services. The company also reported that it had information on over 250,000 scholarships and had “amassed over $40 billion in scholarship data” (Source).  


Two years after changing hands, went offline. What could have GoodCall done with the resource that once claimed to be “the world’s largest online database of college scholarships?” (Source) We use the first part of this article to find out what happened to 


In the second half, we focus on an issue linked to scholarships: award displacement. We look at what this means, and how to avoid award displacement when you win a scholarship. 


What Happened to


The History of



SchoolSoup was founded on March 1, 1988, by Hartley Miller, who became its President and CEO. Apart from starting, Miller, who is currently listed as the CEO and founder of the Amplified Media Group, is also the brains behind companies like MackMatt Sports and Entertainment, Mid-West Heating & Cooling, and the Recoup Group (“a national boutique firm, assisting clients with the identification, preparation, submission, and review of Canadian Scientific Research & Experimental Development (SR&ED) claims”).      


A search through the archived pages shows that SchoolSoup is captured for the first time around mid-2006. At that time, anybody who visited the site would find a link to a scholarship search (promising over $32 billion available scholarship awards), a college search (with more than 4,000 colleges and universities in the U.S.), online degrees, and career schools.   


Foster Child Scholarships


One type of scholarship listed by SchoolSoup was the Foster Child Scholarship. As the name suggests, Foster Child Scholarships are designed to support young people “who are, or have been, in foster care (never legally adopted or expected to be legally adopted)” (Source). 


Foster Scholarship programs belong to a category of awards often referred to as “unique” situations. The Academy of Art University notes that these types of scholarships are often awarded for “circumstances like single parent, orphan or foster care recipient, which means there are various foster care recipient scholarships in the scholarship pool.” You can see a list of new scholarships for students in foster care here


Among the dozens of Foster Child Scholarships listed on were the Benjamin Eaton Scholarship FundCasey Family Scholarship, and the Foster Care to Success Scholarships.  


Announcing the “I am Applying” $1,000 Scholarship Award was not just a website for scholarship listings, it offered its own scholarship award, called the “I am Applying,” in October 2014: The “semi-annual scholarship of $1,000 [aimed] to help pay for college.” It was distributed for the first time, starting on January 31, 2005 (Source). 


In a press statement announcing the scholarship award, Miller says that the award aimed to “encourage current and prospective college students to apply for scholarships.”


Anyone who was either a high school student, an adult looking to head back to school, a current college student, and anyone else looking to attend college or graduate school within 12 months, was eligible for this scholarship (Source). 


GoodCall Acquires SchoolSoup



In October 2015, GoodCall announced that it was acquiring SchoolSoup in a cash deal. Announcing the acquisition, the President of the tech start-up, based in Charlotte, North Carolina, Eppie Vojt, says, “We’re excited to bring our technology and data science expertise to the 700,000 students who currently rely on SchoolSoup.” He adds, “Together, we can create a truly great scholarship search experience for students and their families” (Source).  


Miller is quoted in a press release saying, “We’ve built one of the most robust scholarship databases available to students, and forged truly invaluable partnerships with financial aid administrators and guidance counselors across the U.S.” He adds, “Bolstered by the GoodCall team’s expertise in data science; the data will be even more useful to students. This acquisition is a win for students and their families as much as it is for the companies involved.”


What Then Happened to


Two years after being acquired by GoodCall, the SchoolSoup website went offline. Initially, visitors were getting redirected. However, by mid-2017, the site started to display the message, “’s server I.P. address could not be found” (Source).  


A visit to the SchoolSoup Facebook page shows that their last update was on May 5, 2017 (Source). GoodCall does not indicate what it did with

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