Can outside private scholarships reduce the financial aid a college already offered me?

Sometimes, through a process called "scholarship displacement" or "award adjustment." When you report an outside scholarship, federal rules require the school to make sure your total aid doesn't exceed your cost of attendance. Ideally the college reduces loans or work-study first, leaving your grants intact, which is a genuine win. But some schools reduce their own grant aid instead, blunting the benefit of your hard-won scholarship. A growing number of states have banned displacement of institutional grants for this reason. Ask each college's financial aid office directly how they treat outside awards before you count on the scholarship as pure savings, and always report outside scholarships as required to avoid an aid overpayment.