Does merit decrease need aid?

It may work best to focus your cost-management strategy primarily on one of three main objectives:

  1. low sticker price (for example, at in-state public universities, service academies, or work colleges)
  2. need-based aid (which tends to be best at rich, very selective schools with high sticker prices)
  3. 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).