How do colleges deal with outside scholarships? I'm still a bit confused!?

Correct, as long as you don't get outside scholarships more than your need, they won't deduct the amount of grants you received. The EFC is determined by FAFSA and will always be the same, regardless of outside scholarships.

Here is the link for UT's COA. The yearly COA (which is what the school uses) is actually TWICE what you are quoting. The yearly COA for UT is 25,000. http://finaid.utexas.edu/costs/100undergradcosts.html (Cost of Attendance) You are misunderstanding what the school is telling you. You said, "there's only a certain amount of need based aid that they (the college) can give me." those outside scholarships are not from the school, remember? So the "that THEY can give you"... THEY aren't giving you any outside scholarships. I must remind you, you MUST report all your aid (outside scholarships) to the school and only 1 time out of 1000 will it EVER effect someones aid package. Cost of attendances are VERY high compared to the max amount of grants and loans schools are able to give out. Again, it is very rare to get the full CoA. If all your financial aid (grants, loans, work study, parent loans, scholarships) is over 25,000 for the tear then you need to be worried, if its not, then don't fret any more and report your scholarship to the school. Again, forget your EFC it is not relevant to the formula... or at least not the way you are calculating it. Aid is based on an annual amount, not by a semester. You are calculating it on a semester basis. Let me explain it again, with YOUR examples. efc: 4000 Example: Cost of Attendance UT: 25,000 (12,468 X 2 semesters) Grants: 5,000 Outside scholarship: 1,000 Unmet need = $19,000 which is (5,000+1000) - 25,000=$19,000 .. so this means you can get up to $19,000 MORE in financial aid (grants, loans, scholarships, work study) without going over your schools Cost of Attendance. EFC: 4000 (this is not a dollar amount) and it is not relevant to your situation unless you get parent PLUS loans. LOL You may also need to be reminded that you are REQUIRED to report all outside scholarships to the fin aid office (you signed something to this effect when you applied) when you don't and get caught, the school has the right to go back and modify your financial aid (even AFTER it has been given out). Meaning they will send you a bill for the excess amount awarded over your COA (if you have any, again, which is rare) and won't let you enroll in future semesters until you pay that Bill (the overage) back. Seriously. "Also: If I obtain enough outside scholarships, can my EFC be lowered, or does that number always stay the same?" Your EFC is based on your income and assets, it is NOT a dollar amount and it is NOT what you have to pay the school. So if your EFC is 4000 do not expect to pay the school 4,000. Choose a school that costs 40,000 a year and that is what your tuition would be. Choose a school that cost 3000 a year and that is what your tuition would be. Again, it is not what you pay the school... it's just a code. Your EFC stays the same regardless of what financial aid and regardless of what school you attend. Again, for get your EFC it is not relevant to your situation any .more and has nothing to do with the cost of your school.... so trying to get it "lowered" would have no impact, because it doesn't effect what you pay. Email me if you want more info: I am trying very hard to help you understand this. LOL