<p>Here is the scenario (all theoretical, of course):</p>
<p>School A says that it will meet 100% of student financial aid need. </p>
<p>For this year, costs are:
School A Tuition: 25000
School A Room & Board, etc 12000 </p>
<p>Cost to attend School A is $35,000</p>
<p>The middle class family has an EFC is $23,000, so family will need to come up with $23,000 and theoretically the aid package would be around $12,000 right?</p>
<p>Now what happens if the student gets a $10,000 merit scholarship?</p>
<p>When you say that the “EFC is $23,000”, do you mean the FAFSA EFC? Schools that promise to meet 100% of need generally use the Profile or their own forms to calculate an “institutional” EFC. That EFC is generally higher than the FAFSA EFC, and it’s a number you’ll never see.</p>
<p>Now let’s assume for the purposes of this exercise that the institutional EFC is $23,000. Yes, the family needs to come up with $23,000. It “needs” an addition $12,000.</p>
<p>Generally, and this varies from school to school, your merit scholarship will first reduce any loans, then work-study, then grants from the school. Most often, using your numbers again, your need-based aid would be reduced to $2,000.</p>
<p>Why? Because once you get that $10,000, you no longer “need” it; that need has been met. Now you only have an unmet need of $2,000.</p>
<p>Some schools will allow a merit scholarship to reduce EFC. Many will not. It varies from school to school.</p>