any financial aid given by a university is considered INSTITUTIONAL AID. does not matter if it is called scholarship, grant, or tuition waiver.
you'd have to give me an example of the financial aid you are talking about. you asked me which financial aid is exempt and I showed you the by law.
if the kid receives a scholarship, or grant based on merit, then it is exempt if they meet any of those thresholds.
at private schools almost NO ONE pays the full cost of attendance. financial aid isn't all NEED based it is also merit based and athletic scholarships are athletic based.
the original question was how does an expensive school like stanford sign all these kids. It is not because all these kids are rich and can afford to attend a very expensive school on a very small athletic award. It is because the ncaa provides exceptions for exempted aid and the university and athletic programs take advantage of these exemptions to be able to give this institutional aid in conjunction with athletic aid and remain competitive with the cheaper state schools.