Let’s say a $50,000/year college has offered me a $25,000 merit-based scholarship. According to the FAFSA my EFC is also $25,000. Would I be going for free to that college? How does it work?
Nope. You will be paying your EFC. Schools do not award need based aid to pay for the family contribution.
If the school costs $50,000 and your EFC is $25,000. That leaves a $25,000 balance. You have received a $25,000 merit award. You have no further financial need. you won’t be getting need based aid, in my opinion.
If your EFC is $25,000, then the cost to attend the college is now $25,000 (50K less the merit scholarship). The school is most likely to say: “Look, we have you down to your EFC!”. You technically have no more need, because the merit scholarship brings you down to your EFC.
Some schools are more generous, and may give you some needbased aid. But not $25,000 worth.
If the school says your contribution should be 25k, you don’t get to pay that with your scholarship.
BTW…just because your EFC is $25k and a school costs $50k, that does NOT mean you would get $25k in aid…even if you didn’t get ANY merit.
A school isn’t obligated to only charge you your EFC just because FAFSA calculations says so. Most schools think, “so what”.
As to your Q, merit gets applied FIRST…so that gets subtracted from COA, and then you are left with $25k…which is your EFC anyway.
The only way to avoid EFC with merit is to get a $50k merit award.
But you can seek outside scholarships to offset your EFC.
it is possible that this student could reduce that EFC with outside scholarships because he or she is not getting any need based aid. But those outside schoarships are not likely to be $25,000.
Also, outside scholarships are usually not renewable.