<p>Stringfollies – Not just some schools, all schools. Legally, fin aid has to consider the merit scholarships as a financial resource, and need-based aid is adjusted accordingly. It a matter of federal law, not localized to specific universities, as I have been given to understand it.
At University of Michigan, however, they first reduce “self help” (eg. subsidized loan and work study) where possible instead of grant if the formula works. Other schools may do this as well in their calculations (or instead start on the need-based grants.) My s. received in-state combined merit awards of $12,000 (U of M does give academic + departmental/music merit awards but the music scholarships are “need-informed” and are evaluated AFTER academic scholarships are applied…which makes sense in terms of good fiscal stewardship…The merit scholarship was offered to s. before they’d even seen fafsa or css and appear to be completely unrelated to need.) My understanding of “need informed” does not rule out the recruitment factor, particularly for OOS students as I understand it. (Eg. they say they attempt to make the offers meaningful in relation to the cost of tuition, gap or balance of COA.)
Just wanted to add that info for anyone wanting to know how it works in general and how it works specifically at U of M.</p>