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<p>I think there’s a little bit confusion in terms going on here. I would differentiate between 4 categories:</p>
<ol>
<li><p>Merit scholarships not based on need: these are the ones that you cited as being based on grades, ECs, etc.</p></li>
<li><p>Merit scholarships that are partially based on need: Like 1, but where along with grades, ECs, etc., need is also a factor.</p></li>
<li><p>Merit scholarships that require a level of need: Like 1, but you only qualify to apply for the scholarship if your need is at a certain level (eg. family income under 50k); then it is based on grades, ECs, etc.</p></li>
<li><p>Need based FA: This is where FAFSA and Profile are used to determine need. Need is based mainly on income, but also assets and other factors such as the number of people attending college, home equity (Profile), etc.; debt is NOT factored into these calculations. Once need is established, a college may fill all or part of this need with some combination of Federal and/or Institutional: grants (unfortunately sometimes referred to as scholarships), loans and WS.</p></li>
</ol>