Am I legally obligated to pay back a scholarship?

UPDATED: Oct 1, 2022

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Am I legally obligated to pay back a scholarship?

I received a full scholarship to a Texas school. I signed a contract at age 17 to join. The contract stipulated that if I leave the program voluntarily or am kicked out, I must pay back the scholarship amount incurred thus far. I feel like this isnt legal, given that taxes are paid on scholarships, or some other reasons I havent thought about. How can I leave this scholarship program without paying 80,000?

Asked on October 11, 2018 under Business Law, Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If you signed at age 17, while a minor, the contract may be voidable...BUT to void it, you would have to repay all amounts given to or paid on your behalf, since voiding a contract undoes it--it returns both parties to their respective status quo ante, or how they were before the contract was signed, which means before any money was given to or paid for you. The law does not give you a way to escape the obligation to repay, since either you are bound to do so by the contract, or if the contract is void, you have to return the other party to the position it had been in, which means making sure the money is returned. 

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