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Why Do Merit Aid Applications Ask About EFC?

Question: On a MERIT based scholarship, why do they ask for the EFC? My husband and I have been very frugal and have enough money saved for a college education for our 2 children. However we want our kids to apply for MERIT based scholarships, (they meet the criteria, hard working, extra activities, great grades and test scores, leadership activities etc).

Should our kids even bother completing a merit based application since we have the ability to pay?

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