So, I think that Harvey Mudd says that they replace your financial aid with a merit scholarship if you get it (so it doesn’t stack up), but wouldn’t that make it so that the merit scholarships only matter for people who get very minimal financial aid?
Yes and no. Merit is always better bc it will not go down, regardless of circumstances. So if in year 2 you hit the lotto, or just get a raise, it will not impact the grant.
Also, many schools will give some FA in loans and workstudy. Some will apply the scholarship to loans first, so you don’t have to borrow, the work study so you needn’t work during school.
Beyond that, yes, merit $ is $, and if you have it, some of your need is then covered by that. They only gave so much aid to give and don’t want to give you more than what they perceive is your need.
(Some schools do stack).
This isn’t unique to Mudd, it’s very typical—though as HRSMom pointed out a few schools will stack.
Also, if you would have say qualified for only 10k in FA but you got a 20k scholarship, you come out ahead.