This discussion was created from comments split from: Still Chasing Merit at Great Schools?.
Does getting merit aid reduce your need based aid? Trying to put a list together for second daughter for next year and with two children in college maybe be able to qualify for need based aid.
@Sgmom17 at most schools merit will reduce need based aid (which makes sense when you think about it). You’d need to check with each school to verify.
Also note, that many merit schools do not meet full financial need.
At some schools, merit will first replace student loan and student work assumptions before replacing grants.
But many schools do not clearly state their policies on their web sites.
The answer is…it depends. Some schools will allow stacking of aid of all kinds up to the cost of attendance.
At others, merit aid reduces your financial need…and thus your need based aid.
School specific…contact the colleges…and ask.
Are you talking about institutional merit? Almost always. Outside scholarship? Depends. You could get a #4 situation
It may work best to focus your cost-management strategy primarily on one of three main objectives:
- low sticker price (for example, at in-state public universities, service academies, or work colleges)
- need-based aid (which tends to be best at rich, very selective schools with high sticker prices)
- merit awards (which can be either competitive or automatic for minimum stats)
Typically, merit grants reduce the demonstrated need (and hence displace n-b aid). They are most advantageous when the merit award amount exceeds demonstrated need (e.g. for upper middle income families who otherwise would be paying full sticker).
Even if it decrease the need based aids, it is still good of it offsets only the loan and work study amounts.
Merit aid works best for families that do not qualify for need based aid but cannot afford to pay $70,000/year for four years.
Many students need to target more than one of the above. For example, a student targeting category 2 may not be able to find a safety among those schools, due to most such schools being highly selective (unless s/he lives in a state with good in-state financial aid at in-state public schools), and may need to look in the other categories for safeties.
Category 1 can also include starting at a community college aiming to transfer to an in-state public later. In some states, this is a common pathway for those with low financial resources and not-strong-enough high school credentials to get category 2 or 3.