Merit aid formulas are as varied as colleges themselves, as are the percentages of applicants receiving merit. A few selective private colleges provide large discounts to a small percentage of applicants. More commonly, colleges offer multiple tiers of awards - a pyramid with pre-set dollar amounts. Many schools now use enrollment consulting firms whose statistical models calculate individual awards and factor in likelihood of enrollment.
For example, consider a 50-year-old couple with 2 children (1 about to enter college) and $100,000 of pre-tax income and no savings other than modest home equity and a retirement account. They've saved almost nothing; their after-tax income is about $70,000. Yet they're now expected to come up with about $17,000 per year for 4 years.