How do SAT scores affect financial aid?

About the National Merit Scholarship Program

One example of a merit-based program that uses SAT scores -- or in this case the Preliminary SAT/National Merit Scholarship Qualifying Test (PSAT/NMSQ) -- as a main selection criterion is the National Merit Scholarship Program.

This program is a competition for recognition and merit-based scholarships awarded by the National Merit Scholarship Corporation (NMSC), a non-profit organization. To participate, a student must take the PSAT/NMSQT in a specified year as a high school student planning to enroll in college and must be a U.S. citizen or permanent resident.

Here's how the National Merit scholars are selected out of all the high school seniors in the U.S.:

  1. 1.5 million entrants. The National Merit scholarship program uses the Preliminary SAT/National Merit Scholarship Qualifying Test (PSAT/NMSQ) test to screen more than 1.5 million entrants.
  2. 50,000 high scorers. Each year, a qualifying score is determined to select the top 50,000 highest scorers on the PSAT, which is usually taken at the beginning of a student's junior year. These students have the opportunity to have their scores sent to two colleges or universities of their choice by the NMSC.
  3. 16,000 semifinalists. Among those 50,000 students, 34,000 are designated "Commended Students," and the remaining 16,000 are named National Merit semifinalists. They are the highest scoring entrants in each state and will receive application materials to apply for National Merit Scholarships.
  4. 15,000 finalists. Next, semifinalists who meet academic and other requirements advance to Finalist standing. All National Merit Scholarship winners are selected from this group.
  5. 8,200 Merit Scholarship winners. The NMSC selects 8,200 Merit Scholars winners who will receive one of three types of scholarships: National Merit scholarships, corporate-sponsored scholarships, or college-sponsored scholarships.
  6. 1,500 special scholarships. Scholarships provided by corporate sponsors are also awarded to students who qualified as high scorers but weren't selected as finalists [source: NMSC].

The scholarship program was started in 1955 and has recognized 3 million students and provided more than 335,000 scholarships worth more than $1.3 billion. The program has been very successful in achieving its goal to honor and encourage academically talented high school students.

Recently, however, public concern about standardized tests and their importance in college admissions led the NACAC to conduct a study about the use of standardized tests. In their report, they recommended that minimum PSAT scores should no longer be used to determine eligibility for National Merit consideration. The commission suggests that a student's entire school performance should be evaluated, not a single score on a standardized admissions test [source: NACAC].

While the requirements for this particular program have not been changed, the NACAC's recommendations may have a much more far-reaching effect on how SAT scores impact merit-based financial aid. For today's high school students, it's important to develop a well-rounded profile: Challenging course work, good grades and achievements in extracurricular activities may come into play even more than SAT scores.

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