@NinaBlue the Direct student loan amounts are:
Freshmen $5500
Sophomore $6500
Junior $7500
Senior $7500
If the total scholarships cover the entire amount of the school, then you will not pay your EFC.
The issue is that merit has to cover all of need first before it can reduce EFC.
So if a school costs 40k and your EFC is 15k, then your need is 25k. So if you got a merit award for 35k then your need would be covered and then you’d only have to pay 5k of your EFC.
This is how to reduce the amount you have to pay.
Thumper1 – thanks for the correction. I appreciate the help.
Mom2collegekids –
I have a question. In your example about reducing EFC (post #21) it sounds like there are two parts to the funding package – the EFC and everything else. I got the impression that there are three parts – EFC (parent’s part), student’s part (self-help) and the need portion. The Colleges that meet 100% of need take care of the need part, as they calculate it. Some colleges appear to apply outside aid towards the student’s self-help part before reducing their award (i.e. applying the outside money towards the need portion). However, I am not entirely sure about this and was wondering if anyone else has heard of this?
It depends on how you define it.
Need = CoA - EFC
For most merit aid, it reduce your need. Depends on the amount of remaining need, at least part of it can be covered by self help loan and/or work study. And the school may offer you a grant too.
When a merit scholarship is awarded, the FA office just recalculate your aid. The outcome may be reduction of loan, workstudy, and or grant.