Unallocated Scholarship $$ funds
Yes, that is correct. However some battalions award these prior to the start of Fall Semester.
1) The Battalions get a list of scholarship non-selected candidates from Cadet Command (National Level).
2) If they have unallocated scholarship funds, they are free to distribute them as they see fit. Certain number of 4-year, and 3-year.
3) The Battalions can use the "OML" score from Cadet Command to offer these scholarships, or choose to re-inteview candidates to rank-order, or a combination of both, for candidates that listed their particular school on their national level scholarship application and are still interested in a scholarship.
4) Typically, this occurs with smaller schools... You are not going to see this in high demand, large schools (Big 10, Ivy League, etc.).
5) I would suggest that your DS or DD reach out to the small school Battalions listed on their scholarship application now to inquire and demonstrate their sincere interest in being part of that particular Battalion.
This is the scenario that occured with my DS:
a) Met all 3 boards, not selected for scholarship
b) Contacted the Battalions at his listed schools, got two that told him they reviwed his application file (OML) and thought he was competitive for a scholarship at their respective Battalions. Interviewed with PMS at one, phone interview with PMS at the other.
c) Got the call July 3rd last year from both ROOs at these respective schools. Offered a 4-Year AROTC scholarship at both. Had to choose one that day.
d) Got the contract in the mail about 3 weeks later.
e) School received Fall Semester funds in November (late due to Sequester issues), DS started receving monthly stipend in November as well.
So, the moral of the story is this: depending on the Battalion and school it may be possible to still receive a scholarship from unallocated funds (scholarship turnbacks, candidates going to Academy's instead, medical DQ turnbacks, etc.) prior to showing up in the Fall.
Best of luck!