How to politely decline the university medal? I have studied in an Australian university and throughout my university studies, I declined all prizes awarded to me. It is not that I have had something against my university but it is due to my own ethical values. I believe that a true scholar should have no interest in fame and prizes and that is exactly the reason I declined all the prizes given to me so far (I want to remain a true scholar).

It's not that I see myself superior to others in any way; indeed, I always claimed to be the dumbest student in my university. If it takes someone 10 minutes to understand a math theorem, it would take me at least 3 hours to understand it properly.  Some people unfortunately misinterpret my statement:


  I believe that a true scholar should have no interest in fame and
  prizes and that is exactly the reason I declined all the prizes given
  to me so far (I want to remain a true scholar).


I did not mean in any way, that someone who accepts prizes is not a true scholar and if that is the message conveyed by my statement, then I apologize from the bottom of my heart. This statement only applies to me; if I accept prizes, then I think that I am better than others and because of this I decline prizes because I want to remain a true scholar. I do not want to feel superior to others. This will make me not work hard. Some people said that I am following Perelman's footsteps. I honestly do not even consider myself a successful student; how could I dare to compare myself to Perelman. I am only an ordinary dumb student.

I just received an email from the university that this July (my graduation ceremony), they will award the university medal to me. I am going to decline the university medal but I am not sure what is the best way to do this politely so that the academics at my university will not be offended.

Update: After discussing this with the dean of my faculty, I agreed to accept the university medal. It will be annotated in my academic transcript, record, and testamur. This helps my Phd admission chances in the top 10 universities (something I was told by academics at my university).
The problem is as @WetlabWalter says: the medal is not just for you - it is for everybody that supported you and, in fact, indirectly for your class, and lecturers. 

You have a good reason (for yourself) to decline it, which is commendable. 

But you might offend those who recommended you, those who taught you (who would be indirectly honoured) and possibly your classmates. 

If on weighing your principles against this you still stand by your decision to decline the prize, send a letter as long beforehand as you can, explaining your position and emphasise your history of declining prizes (to indicate that they are not the only one on the receiving end of the rejection). 

Don't decline on the event itself, this will be a major embarrassment.

Finally, if you develop a reputation for declining prizes, grant managers may decide that they'd rather not put glamourous, funded programs your way, so be prepared for limitations of funding in the future. For anybody as brilliant as a Grothendieck or Perelman, that should not be a problem, but if that's not the case, take that into account.

PostScriptum: The balance of prize distribution is very fine. A prize is supposed to honour the recipient. But if the recipient is absolutely outstanding, the recipient would add as much glamour to the prize as the other way around. Therefore, a rejection penalises also the prize-giver. 

Why are prizes at all relevant? You have a point in that a true scholar should not be motivated by prizes and honours. However, in today's very crowded fields, a prize is like a flag that demonstrates "this is how things should be done". It sets a signal of example for others. By rejecting the prize you send the message that you do not care to be an example; which is entirely your right - but you must be aware of that.

Interestingly, Sartre was one of the few people declining the Nobel prize (literature). It was claimed that, some years later, he decided that he'd rather be in need of the prize money and asked whether he could get it retrospectively (after this story, he couldn't). Whether this anecdote is true or false, it makes clear you have to think hard whether there could be a constellation whether you could regret your decision - it doesn't have to be for the money, of course.