<p>My D is applying to a number of schools that offer merit aid. We are also applying for need-based FA. I had assumed that the relevant need based formula would be COA - EFC = FA award (at a 100% based school), and that any merit aid would then act to reduce our EFC. (So, for an institution that has a COA of $50K, assuming our EFC is $20K, that leaves $30K for a FA award, and any merit aid awarded -- say $5K -- would reduce our EFC so that our total out of pocket would be $15k). </p>
<p>I have seen threads that discuss how outside scholarships can reduce one's need-based FA, but I have not found threads that discuss if merit aid from the institution itself reduces need-based aid. It seems counterintuitive to me that an institution that offers 100% need based aid could repackage it as "merit aid" and ultimately be offering the same amount . . . . in essence, no "merit" aid at all. </p>
<p>If this is institution specific, we are looking at Grinnell, Occidental, Willamette, Whitman and Lewis and Clark.</p>
<p>Scholarship/merit aid = same thing. Generally the only time merit aid will reduce your EFC is if there is no need based aid. So in the scenario you describe the merit award would reduce the need and therefore the need based award, not your EFC. Most schools do reduce loans and work study before they reduce any grant awards.</p>
<p>My daughter got a bigger merit award after her initial FA award. Her loans in the FA package were reduced to reflect this.</p>
<p>Part of this is based on federal rules. If there is any federal aid involved (and there is for most schools) then EFC + scholarships/merit aid + need based aid cannot exceed the COA.</p>
<p>This is true for most schools.</p>
<p>My friend's son applied to Willamette, which promised a certain merit scholarship. When they got the award back they basically applied the merit scholarship towards his "need", and so it reduced his need-based aid. In effect, it was just shuffling funding sources, and didn't really lower the EFC, his loans, or his workstudy. It was more or a less a wash.</p>
<p>My friend and her son were quite annoyed after promises of this special merit scholarship. They were really giving serious thought to Willamette because of that scholarship, but it turned out to be a bit of an illusion. The student ended up going elsewhere -- a more highly ranked school with much better aid.</p>
<p>You'll know more about your specific situation after you get an award letter back from each college your D is accepted to. Then you can compare them. She may fare better at Willamette... you never know until you see your specific award.</p>
<p>You can get merit within aid that does reduce your EFC. I have seen packages like that for exceptional students. However, it is rare. More often, merit aid is used to reduce loans and work study first.</p>
<p>This is probably the least understood aspect of financial aid. Yes, merit scholarships absolutely will reduce "financial aid." Why? Because financial aid is based on need, and the merit scholarship reduces the need. It makes sense. The merit scholarship is awarded without regard to need ... if your EFC is $99,999 you will still get that merit scholarship. However, if your EFC is $2000, the merit scholarship is going to get factored into your financial aid package - your need is reduced by the amount of the scholarship.</p>
<p>Here are some excerpts from Occidental's Financial Aid Handbook:
[quote]
Federal regulations require that all outside scholarships and grants
be considered as a resource. Therefore, you must notify the Office of
Financial Aid, in writing, if you are awarded any funds from an outside
source.
...
Outside scholarships are not allowed to reduce or replace your calculated
family contribution.
...
A financial aid award (sometimes called a “package”) usually consists of
a combination of awards: scholarships, grants, work, and loans. These
funds are made available through the College, the federal government,
the State of California and other sources. Your application allows the
Office of Financial Aid to consider you for the following awards:
Grants & Scholarships
Occidental College Academic Merit Awards and Scholarship
Occidental College Need-Based Scholarship (including need-based named
& endowed awards)
(yada yada yada)
...
Occidental College reserves the right to reduce the amount of your
need-based scholarship if you receive additional scholarship or grant
funds to prevent over-awarding aid. This policy is required to conform
to federal and state law.
[/quote]
Look it up with your other choices if you want, but you'll find the same thing. Both outside merit scholarships and college-based merit scholarships are "resources" that reduce your demonstrated need -- not your EFC. Different colleges may have different policies as to what type of need-based aid gets reduced by a merit scholarship (loans vs grants, for instance), so it may not be a total wash: Your kid may end up with a larger portion of his FA package in grants instead of loans. But don't count on merit aid stacking with need-based aid. If you qualify for need-based aid, merit aid is part of need-based aid.</p>
<p>Our outside merit scholarship did not reduce FA, in our case. Each year the school asks where we would like to apply it: 1) student's summer work contribution 2) student's academic year contribution, i.e. work study 3) loans. The University Scholarship, which is need-based, is not reduced. My understanding is that if the outside scholarship results in funds that exceed the COA, then the need-based aid is reduced accordingly, but not otherwise. Of course, different schools probably have different policies.</p>
<p>D was offered nice merit scholarship at Willamette. That was followed by a need based grant that actually increased before she had sent in her acceptance. All of this FA accompanied with loans and work study made our contribution much less than the FAFSA EFC. Plus Willamette has a new school specific loan offer you should look into (on their website home page).</p>
<p>franglish - I may be misunderstanding you post. But if you reduce your WS or loans with the merit money then that is reducing the financial aid. Those are part of FA. The student contribution from summer earnings would not be. A lot of schools don't have a student contribution though.</p>