<p>^Yes, that is an oversimplification. A clearer statement would be that institutional merit awards ONLY reduce EFC if the merit award is large enough to exceed demonstrated need, thus rendering need-based aid irrelevant because you no longer have “need.”</p>
<p>OK, so need is $10K and the merit award is $15K. In that case the remaining $5K can reduce EFC for a $5K out-of-pocket reduction?</p>
<p>In that example, at a $50K school, the initial EFC would be $40K, so the net out-of-pocket redices from $40K to $35K?</p>
<p>^Yes. But remember that the merit award must exceed demonstrated need, not EFC.</p>
<p>Another thing that we’ve touched on, but which is now a bit unclear to me, is the effect of merit on gapping. If a school goes by the “merit comes first and reduces COA” formula, then getting a merit award may have little or no effect on the gap between demonstrated need and the FA package (because the merit award will, from the school’s point of view, reduce demonstrated need and will therefore reduce the FA package as well). Yet I know we heard at least one FA presenter say specifically that a merit scholarship would go to fill the gap before it affected the FA package. </p>
<p>Any wisdom out there on this question?</p>
<p>could you give an example (in terms of $$) as to what you are trying to ask? Just want to make sure we understand the question you are asking.</p>
<p>The majority of colleges in the country do not meet 100% demonstrated need (gap).</p>
<p>Is this the question you are trying to ask?</p>
<p>example:</p>
<p>NYU - ~COA 54,000
You have an EFC 20,000
Kid receives Merit Scholarship $25,000</p>
<p>Demonstrated need is now : $9,000</p>
<p>Financial aid package may be as follows:</p>
<p>Stafford Loan $3500
Work study $2000</p>
<p>There is now a gap of $3500</p>
<p>The gap can be filled in the following ways:</p>
<p>Outside scholarship (which at some schools will close the gap before taking away self help aid)</p>
<p>The family pays so in essence the EFC is really $23,500 (the 20k EFC + the gap).</p>
<p>You can appeal the package in hopes the school tosses some institutional aid your way.</p>
<p>Merit aid usually does fill the “gap,” because that gap is viewed as equivalent to loan.</p>
<p>sybbie719, here’s what I’m asking: We’ve established that very, very few (if any) colleges allow institutional merit to stack on top of NBFA (need-based financial aid) to reduce EFC. This is straightforward when NBFA meets full demonstrated need (i.e., when NBFA + EFC = COA). </p>
<p>But when there’s a gap, does merit aid fill that gap if colleges count merit aid as a discount on tuition, and therefore as reducing the COA before NBFA is calculated?</p>
<p>I’ll use my family as an example. Our CSS EFC is around $15K. Let’s say our son gets into a school with a COA of $45K. Need = $30K. He is offered merit aid of $10K. Now need = $20K. </p>
<p>Let’s say that in the absence of merit aid, the school’s NBFA offer would have been $20K, leaving a $10K gap. But now, that same $20K would amount to meeting full need. Will the college do that, even though presumably they aren’t meeting full need for other students without merit aid? Or will they reduce the NBFA offer so that it is proportional to what other students are getting?</p>
<p>Sorry, I can’t seem to find a way to ask the question simply. But I think Keilexandra may have answered it.</p>
<p>
</p>
<p>The 20k is going to be filled with a combination of work study, Loans (unless the school is a no loan school) and grant aid. given this scenario, there will probably be no “gap”.</p>
<p>using your scenario the need based package could be:
3500 stafford loan
1500 work study
15,000 grant aid</p>
<p>
</p>
<p>If a school meets “Full Need” there will not be any gap.
If it is a school that meets 100% demonstrated need, the merit aid won’t matter because the need will still be met possibly with increased grant aid.</p>
<p>using your example again there is a 30k need that could be met as follows:</p>
<p>stafford loan 3500
work study 1500
Grant aid $25,000</p>
<p>Did this answer your question?</p>
<p>Sorry, sybbie, I don’t think you understood my question–I knew it wasn’t as clear as I would like it to be. I know how FA packages are constructed, and I understand that some schools meet full need. I’m talking about the schools that don’t normally meet full need, but that would effectively meet full need for at least some merit recipients if merit aid is used to fill the gap.</p>
<p>In short, at schools that don’t meet full need, is the gap more or less the same for merit recipients and non-merit-recipients? Or does receiving merit reduce (or fill) the gap?</p>
<p>
</p>
<p>It probably is not going to happen the way that you are asking. </p>
<p>There will be schools that may be doing preferential packaging depending on how much they want your kid that will put together a package consisting of merit + need based aid and leaving no gap. </p>
<p>However, it has been my experience (and I see a lot of FA packages every year) that if there is a big merit scholarship given, in some cases there may be a token amount of grant aid, then work study, loans and the family will still have to fill the gap. In other cases there was only the merit scholarship, work study and loan leaving the family to fill the gap. </p>
<p>Last year I had 5 students admitted to the same school. All got varying amounts merit scholarships. There were a set of twins who got grant for being twins but in the end all of them still had gaps. The merit scholaship is considered FA. However, things still happen on a school by school basis.</p>
<p>OK, so the take-home from this thread for me is that at most colleges, most of the time, merit aid makes no difference whatsoever to the size of your bill unless it exceeds your determined need–it may replace debt aid with cash aid, which is very important in the long term, but this doesn’t affect out-of-pocket outlay in short term. Right?</p>
<p>Right. I would not expect Merit aid to cover or reduce my EFC.</p>
<p>bummer…</p>
<p>
</p>
<p>So if we integrate Keil’s response with Sybbie’s examples, doe it really shake out that there is no pre-determined base aid package, and as colleges do their “black box” aid awards, they will largely just substitute merit for what otherwise might have been given otherwise?</p>
<p>Keil’s example indicates what should happen if a college first calculates its FA offer “blind” to any merit aid, then applies merit.</p>
<p>Sybbie’s examples indicate colleges consider merit and use it to adjust DOWN other FA that might have been granted, making it a zerosum game (other than loans to grants) to the family.</p>
<p>Or am I off track?</p>
<p>^ My comment above keyed to gap need colleges; although would 100% need colleges ever “blackbox” calculate their overall packages for merit to reduce EFC either?</p>
<p>Anyone ever had merit applied to REDUCE their EFC in real life experience?</p>
<p>Sybbie knows a lot more about FA than me; I’d take her word over mine. My experience is mostly with schools that meet most need–i.e. those that really WANT to meet full need but can’t. That subset of schools also has the tendency to use merit aid to full gap, since they only award merit scholarships to students that they really want. I’m thinking of schools like Beloit, Kalamazoo, Knox, Earlham, Denison. (Disclaimer: I don’t know what any of these individual schools’ policies are with regard to merit/gap, but they all appear to make a genuine effort to meet full need.)</p>
<p>Thanks Keil, your responses definitely help get to a full picture.</p>
<p>I do hope Sybbie will drop in again.</p>
<p>The overall message I’m getting is colleges have a fair amount of play, and a family targeting maximum FA (need and/or merit) should focus its shortlist on being at the top end of the college’s profile: a student that college will stretch for as much as it can inside the “blackbox” FA packaging process.</p>
<p>Unless you are getting a full ride scholarship (covering tuition, room, board books, misc), anticipate having to pay your EFC. </p>
<p>You would pretty much have to get outside scholarships that cover all of the university based aid in order to reduce your EFC.</p>
<p>
</p>
<p>If the school gives need based FA, then $10k will be used to fulfill the need (if the school commits to meeting 100% demonstrated need).</p>
<p>If the student is getting 15k in Merit, then the EFC would be 35k, there would not be any need based FA because the student would have no “need”.</p>
<p>^^Re: outside scholarships, mostly true with the notable exception of Colorado College.</p>