So if my estimated remaining cost based on the NPC was 15k (including loans and work study) and I got merit aid, would the merit aid replace the loans first? And if so, would the remaining amount of merit aid be factored into my need-based award, or lower my need as a whole? Any answers appreciated.
Merit aid reduces need based aid.
@TomSrOfBoston Okay and what about the first part?
As far as I understand it, no - the merit would not replace the loans or work-study. I think most schools have a number in mind that they believe you and your family can afford. They then figure out how you will pay for the remaining balance. They calculate/guess how much in federal and state grants you would receive (like Pell) and add on any work study and loans (although there are some schools who don’t count loans or work-study as part of the package at all, which is awesome). If there is still a balance remaining, they hopefully give you a grant for that amount that you don’t have to pay back. If you then get a merit scholarship, I believe they almost always subtract that from the grant that they were going to give you, unfortunately. If the merit scholarship was more than the amount of that grant, then you may be able to reduce your loans.