5 Secrets to Winning Merit-Based Aid

I asked the founder of MeritMore to contribute to this post and I was super excited when Neeta Vallab responded with an enthusiastic, “Yes!” Check out her first-hand insights on merit-based aid. Here’s her story.

Two years ago, my daughter started her college admissions process. She had worked hard throughout high school, managing to have both good grades and a good social life. Our family was excited for her — our firstborn was going off to college! She was responsible for taking standardized tests, researching schools for her list, writing essays, getting recommendation letters and submitting applications.

She was responsible for the nitty-gritty parts of the process.

We were responsible for paying for college.

Sticker Price Shock

Early on, we learned that we are a “donut-hole” family — we make too much to qualify for need-based aid but not enough to pay sticker price. Even with our 529 plan, the cost of schools on our daughter’s shortlist was staggering. A public four-year college is as much as $22,000 per year.

A private four-year college would set us back a whopping $50,000 or more per year, and that’s just for tuition. We’d have to tack on another $20,000 for housing. It’s no surprise that 69 percent of students took out student loans in 2022.

How were we going to pay for college without taking on outsized loan debt?

Merit aid was our answer.

What is Merit Aid?

Merit aid: Why is it a big deal? Why should parents want their children to get merit-based aid?

The largest pool of “non-loan” and “non-need based” money available is merit aid. Colleges use merit aid scholarships to entice students who can boost the college’s applicant stats, which in turn improves their national rankings. Over $8 billion in merit aid is distributed annually by colleges.

Putting strong merit aid schools on your child’s shortlist is a great strategy for middle-class families to reduce college expenses and decrease the need for taking out loans. You don’t have to pay back merit aid. In most cases, grants are renewable if a certain GPA is maintained. Most importantly, merit aid scholarships are also awarded to students who qualify for need-based financial aid. 

How Does Merit-Based Aid Work?

Merit aid scholarships are usually awarded to students in the top 25 percent of a college’s most recently admitted freshman class. These scholarships are mostly extended to students who show academic excellence, but merit aid is also awarded to students who are significantly accomplished in music, art or athletics. There is no separate application process for merit aid and awards are typically announced in your admission letter.

Do All Colleges Offer Merit-Based Aid?

Ivy League schools and other top-tier schools like Stanford and MIT, among others, won’t offer merit aid to their students. Small liberal arts schools are typically the most generous with merit aid awards and state institutions generally have the least merit aid to award. Since many schools offer merit aid, you don’t have to have perfect standardized test scores or straight A’s to get it. Each school will have a different top 25 percent statistic and different criteria for awarding merit grants.

How Do You Find Merit-Based Aid?

You’ll have to go directly to the website of each college you’re interested in to find its common data set. Once you find it, you can apply each school’s top quartile data for your standardized test scores, but not for your GPA.

A merit aid search tool called MeritMore takes your GPA (and standardized test scores if you have them) to generate a list of your strongest merit aid matches (schools where you’re in the top quartile), as well as good schools for you to consider (schools where your quantitatively above average). You can then compare average merit aid amounts for the schools on the list and, if you need to, restrict your applications to the schools that will most likely give you significant merit aid.  

Secret 1: Make sure your child has strong merit aid schools on his or her list.

The best way to get merit aid is to put strong merit aid schools on your list early on in the admissions process. It’s painful for both parent and student to realize that even though you’ve been accepted, you can’t afford to go. 

Secret 2: Prioritize financially fit schools over name-brand colleges.

Dream schools can quickly turn into financial nightmares. Make sure your shortlist is populated with generous merit aid colleges, especially if you need funds for more than just out-of-pocket expenses.

Secret 3: Fill out the FAFSA.

Even if you don’t qualify for need-based financial aid, filling out the FAFSA is a must. Many schools need a completed FAFSA for to get full consideration for merit aid. Remember, merit aid can be awarded on top of need-based financial aid.  

Secret 4: Stay open-minded.

Many generous merit aid schools may not be on your radar. Be willing to thoughtfully consider strong merit aid schools that meet most, if not all, of your child’s criteria. When you search for merit aid using MeritMore, you could discover your “perfect fit” college in the list of your merit matches. 

Secret 5: Compare your merit offers and prepare to negotiate.

Your merit aid award will likely be included in your admission letter. If you’re accepted to multiple schools, compare your offers and don’t hesitate to call your top choice if the merit aid offer is lower than merit aid offers you received from other schools.

Help Your Child Get Merit-Based Aid

After recovering from sticker price shock, we sat down with our daughter and candidly discussed our financial picture relative to the schools she was applying to. We realized that several schools on her list gave very little merit aid. Even if she was accepted, we would be on the hook for paying almost sticker price. Finding and applying to generous merit aid schools was the best strategy for a middle-class family like ours to make college more affordable.

My daughter added two schools that were likely to offer her a significant merit aid award to her shortlist and deleted two schools that historically awarded much smaller amounts. Her final shortlist was balanced both in terms of acceptance probability and financial fitness.