Third-party scholarships and scholarships from your school decrease the total cost of attending school for you,. Since there's less need for money to pay for school, this means they necessarily decrease the amount of need-based aid you'll receive.

If you expect to receive a lot of need-based aid, this doesn't have to be a bad thing. If a third-party scholarship reduces the amount of aid you receive, the school will likely take the reduction in the form of loans, rather than grants. This means you'll have less loans for financial aid, and have to pay back less money after college.

The amount of need-based aid you receive has everything to do with the EFC, or Expected Family Contribution, and not how much the school costs. So your need-based aid will go down if you get an outside scholarship, usually. Since your EFC doesn't change, the amount of aid you receive must change to account for the new total cost of enrollment.