<p>They say they meet 100% of demonstrated need, but they do that with all sources of aid under their control. Because you got the merit scholarship, it meant that they did not have to give you as much in need-based aid to get there. That means they can offer that money to someone else who also needs it.</p>
<p>From your point of view, the merit scholarship looks like an in-one-pocket-and-out-the-other kind of situation, so perhaps you think it is like not getting the merit money at all. They may well have decreased the amount given as loans and the amount of work-study expected in the need-based aid package, so you still may have come out somewhat ahead of the game.</p>
<p>Colleges are also struggling to control costs in any way they can these days. Their endowments have been hit hard by the performance of the stock market in the past year or so.</p>