How do merit scholarships and federal loans fit into financial aid calculation after FAFSA SAI?

Think of it like layers. First layer: schools calculate your 'need' (COA - SAI). Second layer: they award grants/scholarships to meet part of that need. Third layer: federal loans are offered to cover more of the gap. Merit scholarships are usually calculated separately and reduce your remaining cost AFTER need-based aid is figured out. So merit scholarships actually benefit you directly by reducing your final bill, not by reducing what the school thinks you can pay.

it actually depends on the school!! some schools are 'need-blind' and will give you full merit PLUS need-based aid, others are 'need-aware' and will reduce your need-based aid if you get merit scholarships. you should check with each school's financial aid office. my daughter lost some grant $ when she got outside scholarships at her school :

Let me clarify how this typically works (I've been through this process 3 times with my kids): 1. COA (Cost of Attendance) - SAI (Student Aid Index) = Financial Need 2. Merit scholarships are usually awarded FIRST, before need-based aid 3. After merit is applied, schools recalculate your remaining need 4. Then federal/institutional grants are awarded based on that recalculated need 5. Federal loans (sub/unsub) are offered to cover remaining gaps So if your COA is $30,000, SAI is $10,000, and you get a $5,000 merit scholarship, many schools would calculate: $30,000 - $5,000 = $25,000 adjusted COA $25,000 - $10,000 = $15,000 remaining need (not $20,000) This is called 'displacement' and it's why some students feel penalized for earning outside scholarships.

The federal direct loans (both subsidized and unsubsidized) are technically part of your 'financial aid package' but they don't reduce what you ultimately owe - they just change HOW you pay it. The subsidized loans are better because govt pays interest while you're in school. You can always accept/decline different parts of your aid package. When I got my package last year, I took the grants and scholarships but declined some of the unsubsidized loans they offered me.

Also remember that your SAI is not necessarily the amount you'll pay!! This is a huge misconception. Your actual payment depends on the school's funding, policies, etc. My SAI was $12k but I still ended up with a $22k bill after all aid at one school, while another covered much more. Call each financial aid office directly to discuss your specific situation - it makes a HUGE difference.

Trying to call financial aid offices is the WORST. I spent 4 hours on hold last week and never got through. Then tried again and got disconnected twice. I ended up using Claimyr (claimyr.com) to hold my place in line so I didn't have to stay on hold forever. Their service called me back when an agent was available. They have a demo video at https://youtu.be/TbC8dZQWYNQ that shows how it works. Totally worth it during peak financial aid season when everyone's trying to call.

i'm confused abt somethin else - does the SAI even matter for merit scholarships??? i thought merit was JUST based on ur grades/test scores and had nothing to do with financial need or SAI numbers????

Thanks everyone for the responses! For what it's worth, I called two schools today and they both handle merit aid differently. One school reduces need-based aid dollar-for-dollar when you get merit scholarships (so it doesn't really help much financially). The other school applies merit ON TOP of need-based aid, which is obviously much better. Definitely worth asking each school directly!