<p>Lilliana330, USC does not use loans in their FA packages to my knowledge. Where did you get that information? In fact, the only loans in the package will be the Fed student loans alamemom listed above. If, for example, a student’s family had a $0 EFC, and the COA is estimated at around $63,000, the student’s package would include Federal sub and unsub student loans totaling $5500 freshman year, and possibly work study of up to $2500 (not in all packages) and the rest (in this extreme example–$55,000) would be made up of grants (Pell, institutional, and/or merit $$ will combine to get this figure). As you said, for the student who qualifies for this much grant need-based aid, the merit awards are just subtracted from the need-based aid–and the net funding comes out the same. </p>