Grad schools provide merit aid in the form of fellowships, grants, scholarships, assistantship, loans, and in some cases Work Study.
Grad schools don’t provide need based aid…although my kid got a $5000 need grant this year! So sometimes it does happen!
“FA doesn’t take into account things like consumer debt.” But it certainly can take into account the levels of “discretionary” spending. If you need good FA, you probably don’t want them to think you’re taking megabucks trips. This is part of “Do your part.”
@romanigypsyeyes - When a lot of people refer to “grad school”, they also mean law, medical, and business schools in addition to doctoral / masters programs. A few professional degree programs - mainly the very top ones - give a bit of need based aid. For example, I think that Harvard Law, Business, and Medical schools give only need based aid.
@al2simon Yes… I’m aware. I have a professional degree as well. Pretty much everyone in those situations have a 0 or very low EFC which is part of the reason that they don’t give need-based aid.
It does look like Harvard gives need-based for MBAs. Like I said, I had never heard of any.
I don’t think OP is asking how her family can take more vacations; I think she’s asking how families who are getting need based aid are still able to take nice vacations, and if they can afford nice vacations, why are they getting need based aid?
I’m not sure why it matters if it doesn’t apply to your situation, but if they’re getting aid and still able to travel then they may be conserving in other areas, paying with their credit cards, have family members who are helping, or they’re traveling on a shoestring budget. I’m not sure how their traveling could reduce their aid. If anything, it would reduce their liquid assets and make them eligible for more aid.
We took a number of family vacations that were organized and paid for by our parents.
I do not think a family is obliged to eat only bread and water or to wear sackcloth and a cilice just because they receive financial aid. How they choose to spend their money or what vacations they take really isn’t anyone’s business.
However, it’s completely different if - as I think the OP might perhaps be implying - someone has lied in order to receive financial aid that they are not entitled to. This is dishonest, and it’s theft and fraud, pure and simple.
Unfortunately, I think that many people do not see things the same way. They think of figuring out how to get more aid than they are eligible for as some sort of game in which they are entitled to lie and cheat in order to “win”. I guess these are the same people who stole the two thousand dollars that the local 8th graders had collected to help hire more readers for blind schoolkids.
OP said a few FA families “seem to travel really well.” No one’s saying you can’t have some affordable family get away. But asking for help, then overdoing the discretionary choices misses something, to me. If it weren’t college (and underwritten by FA,) say you were stretching to keep current with the mortgage/bills, would it be wise to spend more on treats just because you want to?
What’s ordinarily “no one’s business” is still dollars and sense. FA folks don’t have to say, gee, our calculations show they can pay X from income and assets, work study and loans…let’s throw in 5 or 10k so they can have a nice trip.
And some colleges do ask about vacation expenses on the CSS. Be wise.
Since OP’s definition of a vacation in the context was a travel using a passport. I think I can safely assume what OP meant by “seem to travel really well” is a very luxury pleasure travel. Assuming they are not criminals, reasonable guess can be a. the current FA system is flawed and/or b. the family in question gamed the system, resulting precious FA funds is taken away from family who really needs and is awarded to a seemingly rich family who could have afforded with out the FA.
If so, how would they have done it. What loopholes do we have in typical FA evaluation system? How about a three generations family with a family business that majority asset and and income are reported in grandparents name? 
@SculptorDad, Op didn’t mention passports. That was Oldfort (post 21).
We used to drive on family vacations (cheaper than flying) and stay with family. My parents incredibly kindly rented condos in great vacations spots for a month overlapping with all the kids’ spring breaks. So we would road trip, stay with them, mostly cook and eat in. We didn’t do expensive stuff every day we were there (although there were some options in the resort communities). We would for a couple of days, but spend other days doing inexpensive activities.
I think the OP thinks that people getting need based aid don’t deserve any vacations. My take is that you have no idea who might be paying the vacation bill. Maybe one parent travels a lot and they have miles that can be used for plane tickets. Or they are taking super cheap (6 am departure with 2 stops!) flights, staying with family on the other end, or grandparents are covering part of the vacation cost. As with most questions like this, you have no idea what their financial or family situation is – and it isn’t really your business, to be honest.
I thought OP was just asking.
Some do travel well or make it seem so. Loved the Yosemite example (an some others) and imo, that total isn’t excessive. (Even applying for FA, it’s “defensible.”)
We know how to get the most bang for our buck. Sometimes, it’s renting a house, cooking for ourselves, instead of a hotel and meals out. Or making a day trip out to some event/locale, skipping the overnight. Lawn tickets. Sitting in cheaper seats at a show. Frankly, I don’t care if some hear we go to XXX every year and assume it’s more expensive than they way we do it.
But while the kids were in college and we faced those school bills, if I were offered a pricey vacation at, say, family expense, I know I would have wished they offered to kick in something toward the college bills and pared down the vacation a bit.
I do know quite a few families where the grandparents pay for very nice vacations for the extended family every year. That’s definitely a way someone could take a more extravagant vacation that appears to be beyond their means.
The last family vacation we had was in 2006, just before I got downsized from a job whose income I have not yet replicated, though I did find a new job within two months. Even then, due to H’s travel phobia, the vacation was to a campgrounds 90 minutes away. It was horrible. I am NOT an outdoor person. The next and last vacation I personally had was six months ago when my D and I went to Vegas together for 5 days; we each paid our own way. I only qualified for financial aid when I had two kids in college at the same time and, even then, it wasn’t very much money.
When I was in college and law school and on FA, my vacations were driving trips with friends to see other friends. Right before law school, my then boyfriend paid for me to visit Florida with him. I did vacation while paying back student loans but not after I began having children.
Just an aside: Posters shouldn’t jump to the conclusion that another poster doesn’t know what they are talking about when they post or used an improper term. Just because you haven’t heard of it doesn’t make it not true. When I said financial aid, I meant financial aid, i.e., need based aid. I know the difference. 
Why does this matter? Perhaps the families the OP is talking about have generous grandparents who fund nice vacations. Perhaps some of these trips were to visit family abroad…or far away (we have family in some pretty nice places for a vacation!!).
And how,does the OP know these families are getting significant need based aid?
It matters only if someone on fin aid could actually afford to pay full tuition, but has scammed a way to get fin aid and pay for nice vacations instead of using that money toward college.
We as taxpayers and alumni donors pay for fin aid, so we should care about how our money is being used and whether families who receive it actually need it.
We are paying $70K/yr now for son’s college on a very moderate income. Basically that $70K is about how much we make after taxes. But, we generally lived frugally and saved/invested since before we had kids. Others at our income level who went on nice vacations each year and did not save would be receiving fin aid. That’s the inequity of the system and why we do need to care about how other people spend their money, and ours!
Our only vacations are driving to family these days and to college. We have a son in the Navy in Hawaii and can’t afford to fly and stay at a hotel to see him.
Yes, son got nice merit scholarships at other colleges, but I didn’t want to make him go somewhere else just because we are middle class fools who saved and were not smart enough move money around to get fin aid.
When I said “don’t worry too much about it,” I meant that people shouldn’t worry about how their neighbors on FA (and why would one know this anyway) spend their money, not that we shouldn’t worry about how we spend our own. Speculating about the neighbors’ finances is a useless exercise in resentment.
@itsgettingreal17 I never said you were lying or mixing up terms. I said I’d never heard of it. Someone pointed out examples and I learned.
CC is all about learning about higher education if you’ll recall.
And how would anyone really know this has happened. Just because a family looks like they have a lot of money doesn’t mean they do. Maybe the grandparents paid for their house. Maybe they have huge medical exoenses you don’t know about. Maybe they are living well beyond their actual means and have huge consumer debt.
Or maybe someone else beside the nuclear family is paying for the vacations.
You don’t know.
Where is some data to support your contention that there are lots of students who are on very significant financial aid who are taking lavish vacations. Too many variables to just assume any kid on financial aid taking lavish vacations is scamming the system.