<p>First of all, congratulations to your daughter for her high score!</p>
<p>The 16,000 NMSFs represent the top 1/2 of 1% of PSAT scores in each state. It is definitely an honor, but it is also somewhat arbitrary (for many varied reasons - different cut-offs for every state; test taken only once; test taken early during junior year; scores are not necessarily consistent from year to year, etc.). Thus, highly selective colleges do not put much weight in the honor.</p>
<p>The actual National Merit Scholarships typically go to children of employees whose corporation sponsors the award. They are also generally only one year awards that cannot be renewed.</p>
<p>Some selective schools do include token amounts of money for NMSF. Vanderbilt for example will include $2,000 per year. So you definitely want to check with schools when you apply to see if this is the case. But it is unlikely to be enough to change your decision. The big prizes, as you have discovered, are for schools that bright kids might not consider otherwise. The University of Alabama, for example, likes to brag about how many NMSF they attract (without pointing out that they all receive free tuition).</p>