I am sure this question has been asked before, and probably more than once, and also answered more than once. But I have not been able to find the old threads on this forum.
The question is: What effect, if any, does a merit scholarship awarded by a college have on need-based financial aid provided by the college? Does the answers vary from school to school?
My daughter, currently a junior in HS, is thinking of applying to the University of Puget Sound and Kalamazoo College. Both offer substantial merit scholarships up to $20,000 as well as need-based financial aid. Given her GPA and ACT, she would probably qualify for a substantial amount of merit money. Given our finances, we would probably also be eligible for substantial (though perhaps less) financial aid.
Assuming my daughter received a merit scholarship of, say, $15,000 and we received the same amount in need-based aid, will the school actually take $30,000 off the full tuition or will the school reduce the need-based based aid by the amount of the scholarship thereby effectively wiping out the benefit of the scholarship?
Since merit scholarships are intended to attract strong students who may not otherwise enroll, it seems that the school would need to award scholarship money on top of need-based aid (if there is need). Otherwise strong students who need aid would have no more incentive to enroll than weaker students with the same need for aid. Both would pay the same price.
But I can also see how a school might want to apply the merit money to the financial aid award and say, “Hey, look, you’ve got a nice, fat scholarship and you no longer need aid (or need less aid).”
Anyone know what schools actually do in these cases?
Depends on the school, so you really have to ask the school.
For a school that meets full need, internal merit scholarships generally reduce internal need-based grants dollar for dollar. External scholarships sometimes reduce loan or work-study first and need-based grants second.
For schools that meet less than full need, it’s hugely variable, but you’re more likely to be able to use scholarships to reduce the gap between need and aid.
For schools that care nothing about need (many public schools), they care nothing about merit, either. You can pay full price by any combination of loan or scholarship that you’d like.
But generalities are 100% irrelevant to you; the rule at the particular school your kid wants to attend is the only one that matters to you.
It depends on the school, but most private schools like the two you mentioned will unfortunately just reduce the need based amount by the merit award. You have to ask the FA office at each school, though.
Thanks for your fast replies. Sounds like we should expect any merit award to reduce or eliminate need-based aid. Too bad. I had hoped that a combination of merit aid and need-based aid might actually cover some of our EFC - and actually award my daughter for her academic merits. But as always, if something is too good to be true, it probably isn’t. Still, I will check with the FA office of each school.
IF the COA is $50k and your EFC is determined to be $20k, your need is $30k. If you get a $15k merit award, your need is now $15k. If tuition is $60k and your EFC is still $20, your need is $40k. If you get a $15k merit award, your need is now $25k. Your EFC is still $20k.
Usually the school is not meeting that $30k or $40k with need based FA, so merit aid is good to have, especially if the school doesn’t reduce the need based aid until you get down to that EFC amount.
I think it is pretty hard to get out of paying less than 35k at Puget Sound. The don’t really meet need at least according to one of the coaches. So you may get some need aid but you won’t pay less than your EFC. Merit will replace need, but the merit is nice if you are a full payer otherwise. They do get some very stellar students there but you’d have to apply to see how well they may do for you.
The only real advantage to merit over needs-based in a situation like this is that the merit will stay regardless of improved finances for the family. Need-based is reviewed (typically annually) and you could go from paying a modest amount to nearly footing the whole bill if, for example, a spouse gets a job or you get a bonus, or any other improvement in your financial standing. With merit, it is typically just a matter of the student maintaining the minimum requirements.
Unless you find a school that will pay 100% on needs-based, you may want to follow mom2collegekids advice and look for schools with a higher percentage of merit aid (as a percent of total COA). One of the pitfalls I see online is that people often look at the dollars being offered and think they have a ‘big’ scholarship, but the net price is still hefty. Good luck.
We are deciding among several schools for D1 right now. The are generally on par academically, so it comes down to any significant differences in price and then her personal preferences among the ‘finalists’.
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Depends on the school. In many, but not all, cases, student loans and work study are replaced first, then grants
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It really does depend on the school. The schools that are the most generous (usually with big endowments), will let you replace loans and work-study first and then reduce grants. Other schools will not, particulary ones that have an “inside policy” that “free money” maxes out at a certain amount unless all of the “free money” is from an outside source. Schools have a hard time with FA, so they want to be able to “spread aid around” when they can.
Since your goal is to reduce your EFC, then look for schools with huge merit awards that will mean that your net costs will be less than EFC.
Good deals include schools where the merit award is defined as a % of tuition (or of tuition & fees). 1/2, 1/3, or full…the merit changes with increases in tuition over the four years. If you’re stretching for the first year, be careful if you suspect the merit award will remain a fixed dollar amount each year, but the COA will rise with each year.
Good luck!
It’s been my experience with schools similar to Kzoo (that don’t meet need for every student), that stronger students will get better FA packages, with merit grants, need grants or more often, both.
However, I have not seen offers that lower EFC, only ones that come right up to it for highly desired students and not for others.
So if you can afford your EFC and D is a strong candidate, it’s worth a shot.
@OHMomof2 - thanks for that concept. My D is in the running for scholarships at a non-ranked small LAC. they are requiring FAFSA info before scholarship announcements. I wonder if that’s why they are asking for EFC - so that they can get their merit aid amounts right at that number. Interesting to consider.
While I’m guessing it’s probably pretty rare, I do know one school that offered my D a scholarship * on top of * need based aid: Soka University located in Aliso Viejo, CA.
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Good deals include schools where the merit award is defined as a % of tuition (or of tuition & fees). 1/2, 1/3, or full…the merit changes with increases in tuition over the four years.
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Yes, but make sure that the fine print includes increases for tuition increases. Some with %'s still do not increase. some do!
In addition, as noted above, there are schools which embed merit scholarships in nominally-need-based aid, a practice called preferential packaging (i.e. school offers a better nominally-need-based financial aid package to a student it wants to recruit heavily, compared other students with similar family financial situations).
That’s bad news that financial aid generally replaces merit aid, instead of adding to it.
It sounds like there are some exceptions, though. Does anyone know if some of the high merit aid schools will add financial aid to merit?
Here are some schools I’m interested in. Does anyone know what their policies are? Thanks.
Denison
College Of Wooster
Depauw
Centre College
Rhodes
Sewanee
Hendrix
Knox
Fairfield
Hobart and William Smith
Furman University
Eckerd College
Rollins
Gettysburg
Juniata
University Of Rochester
St. Lawrence University
Allegheny