A Short and Simplified Description of a Need-Based Financial Aid
Need-based financial aid is granted to students who demonstrate a strong financial need, and financial incapacity to continue their education. This is a type of financial assistance that is granted to students with low household incomes.
Both state governments and private institutions or individuals can grant need-based aid. But they are usually set on different terms, and varying eligibility requirements may apply (particularly for private organizations or person/s).
In the US, need-based financial aid can include state and federal grants. State aids are often granted in the form of tuition fee waivers, work-study programs, or financial grants.
A Short and Simplified Description of a Merit-Based Financial Aid
Merit-based financial assistance is granted to students who demonstrate outstanding academic and extracurricular abilities and achievements. This is a type of financial aid granted to students based on the merits they’ve earned through good grades and active participation in extracurricular activities.
Universities and colleges, private institutions and individuals, as well as non-profit organizations offer merit-based aid. However, some world-renowned schools including Ivy League universities do not offer merit-based aid.
Students who receive merit-based financial assistance typically have to maintain a set GPA. Getting a GPA lower than the minimum requirement may result in getting cut off from the financial support program.
Need-based and merit-based aids differ on a lot of factors including eligibility requirements, sources of funds, and application process.
If you are applying for financial aid to fund your studies, you must know the major differences between the two aids to determine which one is right for you.
Here are the major differences between merit-based aid and need-based aid:
Depending on the school or organization that will sponsor the merit-based aid, the application process can be lengthy and requirements are often strict. Some merit-based aid sponsors require the applicants to submit a scholarship CV and be available for an interview.
Some merit-based aid application processes are simpler, where the committee considers only the academic grades of the applicant. It’s important to research more about the merit-based aid you are applying for to know the specific steps of application.
Need-based financial aid requires students to complete the Free Application For Federal Student Aid (FAFSA). Completion of the FAFSA is required to compute the financial needs of the student.
Once the financial need is determined, the student can proceed to the next stage of the application process.
Eligibility requirements for merit-based aid are often set on academic performance, which may include SAT scores, class rank, academic honors, and awards, etc.
Merit-based aid requirements can also be based on the student’s program, gender, ethnicity, race, or religion. This applies to merit-based aid that is granted by sponsors according to a specific group of people or areas of study.
Eligibility requirements for need-based aid are strictly based on the financial need of the student, regardless of his or her academic performance and abilities.
Source of Financial Aid
The sources of merit-based aid are often private institutions or individuals, and universities or colleges.
Sources of need-based aid can also be private groups but are usually from state or federal governments.
Knowing which type of financial aid is right for you can help you save time and resources. Check our resources here at MSM Unify to learn how you can get financial assistance for your education abroad.