The top 50,000 students out of ~1.5 million who take the PSAT test, (based upon their combined critical reading, mathematics and writing scores), are recognized. Qualified students are notified in April the following year (e.g. spring of junior year in high school), and they may name two colleges or universities to be referred to by NMSC. In September (of their senior year in high school), these high scorers are notified through their schools that they have been qualified as either a Commended Student, or Semifinalist.
About 1/3 become National Merit Scholarship semifinalists, based upon proportional representation from all states. The semifinalists are provided National Merit Scholarships application through their high schools. The other 2/3 receive Letters of Commendation.
Special Scholarships for National Merit Program participants - If a student does not qualify as a semifinalist he may be eligible for a merit based scholarships offered by corporation and businesses.
National Merit Scholarship - $2500 single payment. Winners are selected without financial need, college or major choice.
Corporate Sponsored Merit Scholarships - These one time or 4 year awards are offered by corporate sponsors for children, residents, or based upon career plans.
College Sponsored Merit Scholarships - If a Finalist has chosen a college as their first choice by the deadline, they may receive awards from the school that are renewable.
In addition to receiving recognition and scholarships, National Merit Scholars may receive additional benefits at their college of university. For example, a Scholar that I knew received preferential enrollment in classes at a public university, which enabled her to get in all of her classes needed to graduate in four years. That benefit was probably worth more than the value of her scholarship.
For more information about the National Merit Scholarship Corporation, see www.nationalmerit.org