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I have read on CC about FAFSA for merit aid, which begs the question what does a family's financial means have to do with merit.
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If a student qualifies for any of the federally funded grants (Pell, SEOG) or state need based grants, the schools would use that money FIRST and then award any merit aid beyond that.
In other words, they will use federal and state dollars first and then award merit money at some schools. Thus the need for the finaid application forms.