The National Merit Scholarship Program is a college scholarship competition administered by the National Merit Scholarship Corporation (NMSC). NMSC awards National Merit Scholarships based on a competition that includes taking the Preliminary SAT/National Merit Scholarship Qualifying Test. The program began in 1955.

As of 2005, of the 1.3 million entrants, about 50,000 qualify for recognition. Two-thirds of those qualified receive letters of commendation; the remainder become semifinalists, most of whom go on to become finalists. Over half of the finalists go on to receive scholarships sponsored by colleges or corporations.

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To qualify for a scholarship, a student must be

* either a Junior on a four-year high school program or in the second year of a three-year program,
* a U. S. citizen or a permanent resident who has applied for citizenship, and
* a graduate in the year two years after they take the test (i.e., for the 2006 exam the student must graduate in 2008). For graduates of three-year programs there is a slightly more complicated and ambiguous set of selection criteria.

The first category of recognition is Commended Scholars; it comprises about 34,000 of the top 50,000 students. All 50,000 students are initially notified of their standing; from this pool 34,000 are eventually named Commended Scholars (who do not advance further), 16,000 are named Semifinalists; in turn from this pool, the Finalists are selected. The 34,000 Commended Scholars who are not selected as Semifinalists do not continue in the competition and do not receive scholarships from NMSC. As aforementioned, the Semifinalist group numbers around 16,000, though designations factor in equitable state representation. Therefore, each state has different cutoff scores. California's cutoff score for 2004 tests was 217 out of a possible 240 points. Maryland's cutoff score was 220 out of a possible 240 points.

Approximately 15,000 of the 16,000 Semifinalists advance to Finalist standings, based on the submission of SAT scores and an application. The application includes high school courses and grades, extracurricular and volunteer activities, a recommendation from the principal, and a 500-word Personal Statement. The personal information provided is used later in the process to determine the award of scholarships to Finalists; the mere submission of required materials is generally enough to advance to Finalist standing. Generally, Semifinalists who fail to advance to Finalist standing do so because they failed to submit the application, have improper credentials (e.g. a large discrepancy between PSAT and SAT scores), or, in rarer cases, are convicted felons.

For the 15,000 Finalists, there will be about 8,200 merit awards: about 2,500 finalists receive a $2,500 National Merit Scholarship from the NMSC for use at a college or university in the United States; these winners are awarded on a state-by-state basis. There are 4,600 scholarships awarded by colleges which the recipients have reported to NMSC as their first choice ("College-Sponsored Merit Awards"). Around another 2,700 scholarships are awarded to Finalists by corporate sponsors, who often have additional qualification criteria- usually that the Finalist is the son, daughter, or other close relative (e.g. niece or nephew) of an employee of the sponsor.

Finalists who do not qualify will receive a certificate of recognition for their accomplishments. Around 1,600 participants who were not chosen as Finalists will receive Special Scholarships provided by corporate sponsors.

Because the NMSC only awards scholarships to students attending colleges in the United States, a small number of National Merit Scholars lose their scholarship awards. These students are designated as Honorary Merit Scholars, an award which acknowledges achievement without giving the student any financial assistance. Similarly, students who qualify as both National Achievement or National Hispanic Scholars and also National Merit Scholars may only receive the monetary award from one scholarship but can still claim the other as an accomplishment.

Black students who achieve high scores on the PSAT can also compete in a separate NMSC competition known as the National Achievement Scholarship Program. The subsequent designations are similar to that in the National Merit Scholarship Program.

Of 130,000 entrants, 3,000 students are referred to colleges for academic achievement. The 1,600 highest scorers in this group are designated as Semifinalists and are eligible for scholarships. Around 1,300 go on to be named Finalists and nearly 800 receive scholarships. These, like the National Merit Scholarship program, include $2500 scholarships from the National Merit Scholarship Corporation and corporate-sponsored scholarships. Required scores for participation in the National Achievement Scholarship Program are selected on a regional basis.