An Insider’s Guide to College Merit Scholarships

Scholarships and non-need-based grants are a great way to curb college costs, but getting merit aid isn’t easy.

Merit scholarships are awarded to high-achieving students. But, it’s not just about academics, although high grades and admissions test scores are a significant factor in the merit scholarship calculus. Here are a few attributes that get you to the front of the merit scholarship line:

• Strong academic performance. While “straight A” grades are highly helpful, lower GPAs are in play, too, depending on the scholarship provider. Most private scholarships do not directly consider academic performance, although students who do well in school also tend to excel in other areas.
• Demonstrating strong leadership qualities. Being high school class president or captain of the soccer team are good examples of showing good leadership. But, leadership is about more than just holding titles. What did you accomplish as a leader?
• Community involvement/volunteering. A demonstrable record of giving back to the community is important. Volunteering at a food pantry, working at a homeless shelter and raising money for charity are good examples of community involvement. How did you affect other people and how did they affect you?
• Superior abilities in a specific area. Merit-based scholarships are offered to college-bound students and current college students who have a demonstrated significant talent in athletics, arts, music and other specific areas and vocations. Depth matters more than breadth.

Every scholarship provider seeks to award scholarships to the students who best match their selection criteria.

Did you know that scholarships are taxable? Use our Scholarship Tax Calculator to figure out the taxable amount of your scholarships and calculate how much you’ll have to pay in taxes. Amounts used to pay for tuition and textbooks may be tax-free, but amounts used to pay for living expenses are taxable. 

Sources of Scholarships

Merit scholarships are awarded to deserving students by colleges, federal and state government agencies and private groups.

Once you get a merit scholarship and maintain the academic and community standing mandated by the merit scholarship provider, merit scholarships are often renewable throughout the course of the recipient’s college career.

Number of Scholarships

Scholarships don’t need to be repaid, they generally do not depend on financial need, and they’re more plentiful than you might think.

While statistics vary, merit scholarships represent a healthy chunk of the $46 billion available each year in college scholarships from the U.S. Department of Education and individual colleges. That doesn’t count the $6 billion or so given in private scholarships each year.

Merit scholarships awarded by colleges typically range from a few hundred to a few thousand dollars. But, there are about 300 colleges that offer full-tuition merit scholarships to students with high GPA and admissions test scores.

Merit Scholarships as Discounts on College Tuition

Colleges also make a habit of giving merit scholarships to prospective students as an incentive to apply to their college. That practice, known as tuition discounting, can curb a college student’s total cost of attending a college or university.

According to the National Association on College and University Business Offers (NACUBO), tuition discounts via merit scholarships can cut as much as 50% off the price of attending a private college. Note that this discount is measured against tuition rates, not the full cost of attendance. The cost of room and board is not discounted.

But, the discounts after the first year may be much lower, since about half of colleges front-load the grants, giving a bigger tuition discount to freshmen than to upperclassmen.

For cash-strapped prospective college students and their families, tuition discounts and merit scholarships are money worth pursuing – if you can get them.

The trick is to be creative, know where to look, and have the diligence to look in every crack and crevice to dig up college merit scholarships. Use these tips to get the job done.

How to Hunt for Merit Scholarships

Don’t let an average grade point average stop you. Contrary to popular belief, GPAs as low as 2.0 can clear the academic standing threshold at many colleges and universities. Consequently, even if you’re an average student, don’t let a mid-level GPA stop you from applying – you have more academic wiggle room than you think. But, don’t expect to get a full-tuition academic scholarship with a C average. Instead, you might have to look for scholarships for other talents, such as arts or athletics.

Don’t bother with the Ivies. By and large, Ivy League colleges don’t give out merit scholarships. Many smaller, elite private schools don’t either. Instead, those colleges and universities favor need-based scholarships. You’re more likely to find merit scholarships at second and third tier institutions.

Start with the National Merit Scholarship Program. The National Merit Scholarship offers over $42 million in more than 8,700 merit scholarships each year. All you need to do to qualify is be a high school student in good standing and score well on the PSAT in October of your junior year in high school.

Cite your target school as your “top choice.” Colleges have feelings, too, and are more partial to awarding merit aid money to applicants who have established that the school is their number one choice. Make sure you mention that on your application when applying for admission. But, don’t tell all the colleges that they are your first choice, since there can be only one.

Focus on honors programs. College honors programs, especially at state public universities, are rich havens for merit scholarship award money. If you’re planning on focusing on a specific area of study, aim for an honors college and target merit scholarship aid – especially for high achieving students in that field of study.

Aim for local scholarships given by community groups. Community groups are an often-overlooked source of merit aid scholarship money. They’re not highly advertised and it helps to have local connections to find them. Start with your high school’s school counselor, which should have a list of reliable merit aid providers linked to the community. Look for the local PTA scholarship, dollars for scholars and money awarded by the local community foundation.

Leverage free scholarship search sites. Thereare more than a dozen free scholarship matching services, such as Fastweb and the College Board’s Big Future. Fill out a profile and these sites will match you up with scholarships for which you are eligible. Answer the optional questions, not just the required questions, for more matches. Apply to every scholarship for which you are eligible. But, avoid any opportunities that charge a fee. If you have to pay money to get a scholarship, it’s probably a scam.

Feel free to negotiate. Just don’t call it negotiation.Colleges call it a professional judgment review, special circumstances review or financial aid appeal. You will need to justify your appeal by documenting special circumstances that affect your ability to pay for college. Special circumstances include changes in family income over the last two years and differences between your family’s financial circumstances and the financial circumstances of typical families. If your net price at your first-choice college is much higher than your net price at other colleges, it doesn’t hurt to appeal for more financial aid. It’s possible that the first-choice college was not aware of your special circumstances and may make an adjustment when you tell it about your special circumstances.

You Can’t Score If You Don’t Play the Game

The chief takeaway on merit scholarships? That’s easy – there’s plenty of opportunities to get a merit scholarship and qualifying is likely easier than you think.

The key is doing your due diligence, applying for as many merit scholarships as possible, and using all the sources – online and off – that you can in finding the best merit aid scholarship opportunities for you.

Apply for every scholarship for which you are eligible. You can’t get money if you don’t apply.

Do all that and you’re well on the way to accessing free money for college – and a lower student loan bill when you leave college.