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Last Updated On: September 14th, 2020

The FAFSA and Profile (discussed in these previous posts: Part 1 and Part 2) will determine your family’s financial need and “Expected Family Contribution” (EFC), but it’s up to the school and the government to determine how much you actually pay.

Government Grants

Certain forms of government student aid, such as Pell Grants and Cal Grants, are automatically granted to students who meet the respective income, enrollment, and GPA requirements AND complete their forms on time. While the Pell Grant is only for lower-income families, the income ceiling for the Cal Grant includes many middle-class families, provided the student attends school in California.

Institutional Need-Based Grants

If you don’t qualify for a government grant, you might still receive a grant from your college. Several competitive, well-endowed schools will meet your full financial need (the cost of attendance minus the EFC), provided you get into the school. Most of the Ivy Leagues, for example, meet the full financial need of students who are admitted, but getting in is very difficult. Schools with smaller endowments sometimes can’t meet full financial need, which means that even after your aid package you’ll have “unmet need” that exceeds your EFC.

While merit is officially not a factor in need-based aid, if you’re a top applicant then the financial aid office is more likely to go out of its way to accommodate your needs than if you barely make it in.

Merit Scholarships

Some schools—most notably the Ivy Leagues—award no merit scholarships (awards granted regardless of financial need). Other schools, however, award every student a merit scholarship. And many schools fall in between, offering a limited number of merit scholarships.

Schools have such drastically different policies about merit scholarships because they are a marketing tool as well as a reward for top students. Research has shown that many students (and their parents) feel more excited about attending a college that costs $60,000 and offers them a $20,000 merit scholarship than a school with a full-price of $40,000 and no scholarship. This explains why certain schools award every student a merit scholarship instead of simply lowering everyone’s tuition. Since the Ivy Leagues already attract the country’s most talented applicants, they focus their resources on meeting the full financial need of students who are less well-off. A school that is not quite as competitive, however, might use merit scholarships to attract more students.

There are also institutional merit scholarships designed for a specific type of student or major. Some have additional application requirements beyond simply applying to the school, and it could be worth thousands of dollars to take the time to complete an additional essay or application. The best way to find out about school-based merit scholarships is to check the college’s website.

You’re most likely to earn a merit scholarship at a school where you’re near the top of the applicant pool, which likely means the school is not the most “competitive” you could possibly attend. This doesn’t mean it’s a bad school; if you take finances into account, a “second tier” college that offers a large merit scholarship can still lead you to a very successful career without bogging you or your family down in debt. One classmate of mine, for example, chose to attend the local state university on a full merit scholarship instead of a more prestigious and expensive school. Since she saved her parents so much money, they gave her a lump sum upon graduation, which she used to buy a house!

The more competitive you are as an applicant, the more likely schools will meet your full financial need and the more likely you’ll be offered a merit scholarship. So besides filling out all your financial aid paperwork on time, the best way to keep college affordable is to make your grades, test scores, and extracurricular achievements as strong as they can possibly be.


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