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<p>It does seem in many cases that “winning” the $2500 award is actually losing, since the college awards can be as large as $2000/year = $8000.</p>
<p>Three reasons the $2500 might be better: (1) it can be used at any college, and there are many that don’t give school-sponsored awards, (2) the amount of the college-sponsored awards is usually need-based, so a high EFC student is slightly better off with the $2500 than the minimum $500/year college-sponsored award, and (3) if you get a large merit scholarship from your school, it normally includes the college-sponsored portion, but the college will likely allow you to take the $2500 NMSC-sponsored portion in addition, since it’s an outside scholarship.</p>