College can be one of the most expensive purchases a family makes. When a family doesn’t qualify for need-based financial aid, merit aid can be a viable option. Families looking for merit aid, which is basically “free money” typically awarded for all four years of college, should identify institutions where their student may qualify.
As a Certified Educational Planner, I receive questions regularly about merit aid as parents begin the college planning process. Here are the answers to the most frequently asked questions:
What You Need to Know about Merit-Based Scholarships
1. Merit-based aid can be a key factor in choosing a school
Pursuing merit-based aid is dependent on several factors, but most families will want to consider at least a few colleges which offer free money as an enticement to attend.
Families should first find out if they qualify for need-based financial aid. Students typically must apply for need-based aid each year, while merit aid is most often awarded automatically for all four years. If a family qualifies for need-based aid, then it’s probable that merit aid awarded will offset the financial aid award. For example, if a college calculates that a family needs $30k per year in aid, and that student is then awarded $20k per year in merit, their financial aid might then drop to $10k per year.
Depending on how the numbers work out, you may choose to target merit-aid schools. But if a family doesn’t qualify for need-based aid, then merit aid can be a wonderful way to make college more affordable.
2. Even “average” students can receive merit aid
This is a big misconception among parents who are often surprised to hear that their teen will be eligible for merit awards. As a general rule of thumb, a student wants to be toward the top of the college applicant pool (often 25 percent) to receive merit. But all colleges operate independently, and some schools award merit to only the top 2 percent of their pool, while others will provide merit scholarships to a larger percentage of applicants.
No one is surprised when the high school valedictorian receives large merit scholarships, but often students in the bottom half of their high school class can also earn merit awards at colleges that deem them desirable applicants. Many colleges discount their “sticker prices,” by liberally offering these merit-based scholarships. This year, we are seeing colleges offer higher merit scholarships to “average” students than ever before.
3. Research merit aid to determine what your student can expect to receive
You can log onto individual college websites and search “merit scholarships.” You will be taken to the financial aid page, where the college will indicate whether or not they award merit.
Some colleges list on their websites approximately how much merit a student might be awarded based on their academic profile, while other colleges may provide a written merit aid estimate before the student applies. Many colleges simply have students apply, and if admitted, they award merit at that time.
You can research average merit awards at individual colleges to see if the numbers look appealing. Your teen can also ask admissions about merit aid, as most institutions are more than happy to provide details.
4. Know what questions to ask
Every college handles merit aid differently, so you need to research to understand each institution’s merit aid policies:
- Do all applicants get considered for merit, or is there a separate merit application that needs to be completed?
- Will the merit award automatically renew each year?
- Is there a specific GPA that you must maintain to keep your merit award?
- What percent of incoming freshmen receive merit awards?
- What is the range of merit awarded? (Lowest to highest)
- What is the typical profile of students at each merit award level?
- Do you have to interview for merit competitions? (for example, finalist rounds)
- If you switch majors/programs, will you lose your merit scholarship?
- Is merit aid only awarded for academic accomplishments, or do you also award merit for artistic and athletic talent?
5. Not all schools offer merit aid—but many of them do
All types of colleges and universities offer merit aid. Certain schools, however, have a policy of only awarding need-based aid. Ivy League universities and many liberal arts colleges, for example, do not grant merit awards. But there are some highly selective schools that do, including Tulane University, Vanderbilt University, University of Chicago, Emory University, University of Notre Dame, and the University of Southern California.
There are also some less competitive, but excellent, schools which offer extraordinary merit scholarships that discount the high sticker prices, such as Union College, University of Richmond, Muhlenberg College, Case Western, Boston University, University of South Carolina, University of Alabama, and more.
With college costing as much as $80k per year, merit aid can be a valuable option for families. Many of the students I have worked with have qualified for large annual merit awards—as much as $25k to $30k, as well as free tuition or even a free ride! They just needed to know where to look.