Defining Merit Aid
Merit aid is a form of student aid that is not based on the family's ability to pay for higher education, but rather the student's outstanding achievements in high school, be it academic, musical, etc. Merit awards are usually scholarships, or tuition discounts, that do not require repayment and are awarded regardless of the family's finances.
Fairness of Merit Aid
In 1995, 43 percent of students attending private colleges received need-based aid. By 2007, that figure declined slightly to 42 percent. However, the percentage of students receiving merit aid jumped from 24 percent to 44 percent, almost doubling in just more than a decade. At the heart of the merit aid debate are two questions: Should financial aid dollars be awarded to students who show they are best qualified for college, with the highest grades and standardized test scores, regardless of their ability to pay? Or should those funds be awarded to the neediest students who may not be able to attend college without financial help?
The more selective the school, the less likely a student is to receive any merit aid. For instance, Princeton, Harvard, and Yale offer generous need based financial aid packages, but no longer offer any merit aid. However, there are enough families willing to pay the full sticker price for a 'name brand' education, so elite schools need not be concerned with empty seats in the classrooms. For smaller regional colleges filling a freshman class remains a challenge, and merit aid is essential to the bottom line, as many recipients still pay enough in tuition dollars, merit award notwithstanding, to keep the college operational. Lastly, for those schools who fall somewhere in between, merit aid serves as a recruiting tool to enroll top students who will boost class averages and support a strong national ranking. And this shaping of classes, or 'buying' of students, is at the heart of the merit aid debate.
Preferential Packaging and Merit Aid Awards
To be a likely candidate for merit aid, a student should be in the top third of the applicant pool for a particular college or university. To entice a student at the top third to enroll, a college may award a 'preferential package' of aid. Preferential packaging is most common with private colleges and essentially means offering a more advantageous financial aid package (ie., more merit aid in scholarships and less self help) to an applicant based on the desirability of the student relative to the others in the applicant pool.
Conversely, students who are in the bottom half of the applicant pool yet still offered admission, may expect their financial assistance to include more self-help aid such as loans or work study. And lastly, those students who are closer to the bottom of the admitted group of students may realize that their financial aid packages do not meet all of their demonstrated need.
Colleges that Award the Most Merit Aid
For those industrious students who work hard and are in search of merit aid to lessen the tuition burden on their families, US News compiled a list of those schools that awarded the most merit aid in 2012-2013. These schools have varying levels of selectivity, but I believe this is a resource worth saving, especially when you have a high achieving student who lacks demonstrated financial need.