What is a merit scholarship?

• Merit scholarships are usually based on exceptional academic achievement, such as a high GPA.
• Schools will give merit aid to entice high-performing students to attend their programs.
• Private organizations may also offer scholarships to students who hit certain requirements.
• Read more of Insider's student loan coverage here.

Scholarships may reduce or eliminate the need to take out loans for college, which can save you thousands of dollars in the long run. You don't need to pay back any scholarship money you receive, making it one of the best forms of financial aid you can get.

However, before you search for merit scholarships from private companies, check with your college to see if it will let you stack private scholarships and grants on top of aid the college offers. Sometimes a college will deduct whatever aid you receive from a private source from the amount of grant or scholarship aid it offers you.

What is a merit scholarship?

Merit aid isn't based on financial need. Merit scholarships are usually given out based on exceptional academic performance. This may be determined by a high grade point average, a great ACT or SAT score, or another noteworthy academic achievement.

Some merit scholarships are designed for people with specific college majors. You may also receive a merit scholarship if you display significant artistic or leadership skills, such as playing an instrument or leading a particular club.

You can get a few hundred dollars up to the full cost of attendance, depending on the amount of funds your college has available and your particular qualifications. You may have to maintain a certain GPA to keep your merit scholarship.

Merit aid may recur throughout your time in college or might be a one-time award.

How do you get a merit scholarship?

Many schools offer merit aid, and you can often get them simply by applying to the school itself. Schools will often advertise the merit aid they give out as a way of enticing high-performing students to attend their programs.

You may have a better shot at receiving a merit scholarship at a school where your grades or test scores are above those of the standard applicant accepted by the college.

Private organizations also offer merit scholarships - some of the bigger, more popular ones include the Gates Scholarship and the Coca-Cola Scholars Program Scholarship. You can apply to private scholarships through their websites, and some may require essays or letters of recommendation.

Some merit scholarships may target members of specific groups or students from particular areas.

Merit scholarships vs. other types of scholarships

Look around at different schools and private sources of scholarship money to get the most aid possible. You might qualify for more aid than you think, and some schools may become more attractive options based on their merit aid packages.