A student in this situation needs to assess safety/likely/match/reach based on the merit scholarship needed for affordability, not admission.
While automatic-for-stats merit scholarships can still be safeties if the student has the stats, most competitive merit scholarships should be considered reaches, since there tends to be little information on how competitive they are (if they are at colleges where admission is a reach, those colleges should be considered extreme reaches for the scholarships).
Some such students may have only safeties (automatic-for-stats merit scholarships) or reaches (competitive merit scholarships).