Question: If my son is eligible for need based aid and a college scholarship (academic or athletic). Does the scholarship replace the need based aid first or reduce the amount my son pays?
Answer: If this is a non-school aware, you need to investigate the school's outside scholarship policy. If it's a school award, you should call the financial aid office directly. I would guess it's unlikely that the school would want to replace federal grant aid with institutional grant aid since it's essentially the same to the student.
A site I've used...
http://www.FinancialAidQuick.com/
Hope that helps.
Others:
It depends on the university. However, universities usually try to replace aid in the following order:
1. replace loans
2. replace out-of-pocket tuition payments
3. replace grant aid
So pretend your son wants to attend an institution that costs $25,000 a year, and he gets a $10,000 athletic scholarship. His aid package gives him $5,000 in federal loans and $3,000 in need-based grants. The scholarship will cover the loans and $5,000 off the cost of tuition, and he will still get the $3,000 in grants as well.
This is what universities hope to do and try to do, generally. However, especially in these tough financial times, lots of colleges are having to rejigger their aid packages. I'm not sure how this will affect things, but I suspect that universities in tough straits will change the order to look like this:
1. loans
2. grants
3. out-of-pocket tuition
That would be a new order, but lots of colleges are in tough times so...