Private scholarships can actually reduce parts of your financial aid package. How? Colleges must consider outside scholarships as a student’s financial resource, available to pay for education costs. If a college financial aid office meets your full financial need, government regulations specify that any scholarship money you win lowers your need figure on a dollar-for-dollar basis. What should matter to you is which types of your aid are reduced or eliminated -- self-help aid (loans or work-study) or need-based grants.