Ask Cappex: How Does Merit Aid Work?

In Paying for College on Apr 26, 2016

Our college expert Mark Kantrowitz answers your questions about college and financial aid.

Q: Exactly how does merit aid work? Do you apply for it in a similar fashion as the FAFSA?

A: There are two types of merit aid. Merit aid includes grants awarded by individual colleges and private scholarships awarded by independent foundations, corporations and philanthropists.

Colleges and universities award grants that are based on merit instead of financial need as a recruiting tool. For example, about 300 colleges offer full-tuition academic scholarships to attract students with high admissions test scores.

Some colleges offer non-need-based scholarships to attract full-pay students who could afford to pay the full cost of attendance even if they got no financial aid. Even with the merit aid as a discount on tuition, the college will still net more money from the full-pay student than from several low-income students.

Merit aid funding is limited. Scholarship providers receive more qualified applications each year than they have money available. Each scholarship provider is searching for the student who best matches the provider’s selection criteria. So, depth matters more than breadth.

To apply for merit aid from a college or university, ask the college’s admissions office. Often, the application for admission is also used to determine eligibility for the college’s merit aid. In some cases, though, a separate application will be required.

To apply for a private scholarship, obtain the scholarship application from the website of the scholarship sponsor. Each scholarship provider has its own application form, although a scholarship application data standard called ScholarSnapp is slowly being adopted by scholarship providers. Find private scholarships using a free scholarship matching tool, like

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