Need-Based Scholarships

In the past 20 years, the cost of in-state tuition and fees at public colleges and universities has increased by a whopping 211%, according to US News & World Report.

The good news: students can get extra money to pay for college by filling out the FAFSA form.

Need-based scholarships are financial aid programs from the US government, academic institutions, non-profits and others that are awarded to students based on their demonstrated need.

Unlike merit-based scholarships, they are awarded based solely on the financial need of undergraduates, though some may have academic components.

Why Do Colleges Offer Need-Based Aid?

Colleges and universities offer need-based aid to give students from low-income backgrounds (and thus have limited financial resources) the opportunity to pursue postsecondary education.

Besides institutions of higher education themselves, need-based aid can also come from the following:

  • Federal government
  • State or local government
  • Private businesses
  • Non-profit organizations
  • Professional associations
  • Local or community organizations
  • Other third-party business

The different types of need-based aid from the US government that college students may be eligible for include:

  • Scholarships
  • Grants
  • Loans
  • Work-study programs

On the other hand, some schools do not participate in any federal aid program, which keeps them from taking any money from the US government and thus remain independent.

The following are some of the said institutions:

  • Grove City College
  • Hillsdale College
  • New Saint Andrews College
  • Pensacola Christian College
  • Principia College
  • Sattler College

Knowing whether or not the school you wish to apply to offers need-based aid usually requires you to pay its website a visit and check out the admissions or financial aid page.

Most of the time, a college that instructs applicants to fill out the FAFSA form has need-based aids to offer.

It’s also worth pointing out that, generally speaking, public institutions award more need-based aid.

But it’s important to note that, by and large, need-based aid offered by private institutions is larger in amounts than at public institutions to set off some of the steeper tuition costs and other expenses.

How Much Can Need-Based Aid Be?

The amount of need-based aid students can receive can vary, depending on various factors such as the source of the financial assistance and how much funds institutions have.

When it comes to how much need-based aid you can get, this is the general rule…

Your need-based aid package must not exceed your financial need, and your total financial aid and other Estimated Financial Assistance (EFA) must not exceed your cost of attendance (COA).

Simply put, your EFA is the total amount of financial aid you receive.

Your EFA can be anything from scholarships, grants to loans, and it can come from the federal or state government, college or university, or private organizations or companies.

Besides the computation above, a few other factors can impact how much need-based aid you can get, such as:

  • The type of institution
  • The program you are enrolled in
  • Enrollment status
  • COA

Since many types of financial aid are given on a first-come, first-served basis, even the time you submit your completed FAFSA form could have an effect on the award you could be eligible for.

According to the college ranking by The Princeton Review on how much financial aid is awarded as well as how satisfied students are with their award packages, the average need-based aid at the top 10 institutions was $45,447.

But because each one’s financial circumstance is unique, need-based aid amounts can vary tremendously.

To have a much better idea of how much need-based you could receive, you can use the FAFSA estimator, which is designed to give you an early estimate of the amount based on the initial data you will provide.

After getting an estimation, you can head to your top-choice college’s website and use its net price calculator to see what your cost of attendance would look like if you enrolled.

Who Qualifies for Need-Based Aid

Students from low-income backgrounds are usually the ones who are qualified for need-based aid. To be eligible to apply for it, undergraduates must demonstrate financial need, which is based on the income and assets of their families.

Contrary to popular belief, poor students are the only ones who can qualify for need-based aid.

Not a lot of college-bound teens are aware of the fact that those from middle-income families who still need some help in paying for college may qualify, too, and they never learn that they are qualified because they did not fill out the FAFSA form.

On the other hand, students from high-income families who are financially capable of taking care of all educational costs are very much unlikely to qualify for need-based aid, no matter the source — the government, colleges, non-profits, etc.

There are instances where demonstrating financial need may not be enough.

Depending on the provider of the need-based awards, students must not only meet certain financial requirements but also some merit criteria — sometimes, it’s also a must for awardees to maintain a minimum GPA to stay in the program.

Also, students from low-income backgrounds are not eligible for some form of need-based aid.

For instance, they will not qualify for need-based financial aid from the federal government if the colleges they are attending have no accreditation.

11 Interesting Facts About Need-Based Aid

In this part of the post, I will tell you some of the most interesting things about need-based aid you might want to learn.

1. The Pell Grant is the Most Popular Type

Various need-based aids are in existence.

Of those, nothing is as popular as the Pell Grant, which is a form of financial aid from the federal government that undergraduate students do not have to repay, except under certain circumstances such as:

  • Withdrawing early from the program for which the grant was given
  • Changing enrollment status in a way that reduced one’s eligibility for the grant
  • Receiving Pell Grant funds from more than one school at a time

Up to 34% of all undergraduate students in the US receive a Pell Grant — the maximum award an eligible student received is $7,395.

The amount of Pell Grant award you can get depends on the following factors:

  • Your EFC
  • Your COA
  • Your enrollment status (full-time or part-time student)
  • Your plans to attend school for one academic year or less

To apply for a Pell Grant, filling out the FAFSA form is the first step.

2. It’s Possible to Receive More Than You Need

The federal government offers various kinds of need-based financial aid — some have to be repaid such as loans, while others such as scholarships, grants and work-study programs typically need not be paid back.

Similarly, a lot of colleges and universities offer an assortment of need-based types of aid.

Depending on the criteria set by the need-based aid provider and the criteria met by the student, it’s possible to receive multiple need-based awards to cover as many educational expenses as possible.

It goes without saying that the more need-based aid you get from the US government and/or postsecondary institution you are attending, the less out-of-pocket college expenditures you have to deal with.

However, it’s important to also take debt into account.

That’s because some need-based loans are not free money (read: they have to be repaid after some time), and they can affect a college student’s overall educational debt and long-term financial situation.

So, before you grab every need-based opportunity that comes your way, do the math and make smart choices to avoid putting yourself in a quandary after graduating and starting your professional career.

3. Not All Need-Based Money is Free

Many people assume that just because need-based aid is awarded means that it’s free.

It’s definitely true that need-based scholarships are nothing like loans that students need to repay after graduating from or dropping out of college — and with interest, too!

However, there are instances in which a need-based award has to be paid back by the borrower.

A grant, for instance, needs to be repaid if the student withdraws from the program or he or she has failing grades — it’s all in the 60% rule set by the federal government.

Simply put, it states that you will have to repay a part of the grant you received if you drop out of the program before the 60% of the payment period in which financial aid is received.

So, if you are a need-based aid awardee, do not quit or drop any class without meeting with the Financial Aid Office.

4. Eligibility is Calculated Every Year

The federal government and many colleges and universities that offer need-based aid calculate an undergraduate student’s eligibility to receive an award using the information on his or her FAFSA.

Similarly, they determine the eligibility of the student for need-based aid for one academic year only.

It’s for this reason exactly that undergraduates must reapply for financial aid each and every year spent in college to maintain eligibility.

So, in other words, filling out the FAFSA at the start of every academic year is a must.

That’s because the financial situation of a student’s family can change every year, and the federal government or the institution offering need-based aid must recalculate how much award he or she is eligible for that particular academic year.

Needless to say, the amount of need-based aid one can receive can vary from one year to the other.

5. Not All Need Scholarships are Renewable

As just mentioned, undergraduate students must reapply for need-based aid each year to remain in the program.

There are times, however, when there is no need to fill out the FAFSA form all over again the following academic year because the need-based aid is the non-renewable type — it’s awarded for one year only.

For instance, Ohio Wesleyan University offers a need-based aid called the Bishop ACCESS Program.

The said program is need-based and, like other need-based aids, applicants must demonstrate financial need.

However, unlike most other need-based awards, the Bishop ACCESS Program is non-renewable. It also has a merit component where undergraduate students have to maintain a cumulative GPA of 2.0 to remain eligible for it.

When applying for some type of need-based aid, make sure that you check whether it’s one-time only or renewable each academic year so that you can explore your options and plan ahead of time.

6. Some Full-Ride Scholarships are Need-Based

Full-ride scholarships, which are awards that cover each and every expense related to college, are rare.

The ones that everyone hears about the most are awarded by the Ivy Leagues and other highly selective postsecondary institutions, which can make any individual easily assume that those golden full-rides are merit-based.

Well, some full-ride scholarships are need-based, too.

As a matter of fact, some of them are also based on certain niches or programs — there’s a full-ride available for different types of students.

However, the fact remains that less than 1% of all college students get a full-ride scholarship.

7. You Should Apply Even If You Think You Don’t Qualify

Filling out the FAFSA, which is the single most important step to apply for federal financial aid, is cost-free.

Many families make the mistake of assuming that they don’t qualify for any financial aid.

As a matter of fact, the National Postsecondary Student Aid Study (NPSAS) says that 44% of students do not apply for any aid because they think that they are not eligible for it.

8. Online College Students May Also Qualify for Aid

Undergraduate students who are working on their respective degrees online may also qualify for the same financial aid programs, both merit- and need-based ones, as their on-campus counterparts.

To qualify for federal aid, however, the online institutions they are attending must be accredited.

Other than need-based aid from the US government and online schools, distance learning enrolled in virtual degree programs may also apply for scholarships exclusively made available for online learners by various third-party providers.

9. Community Colleges Offer Money, Too

Many college-bound high schoolers assume that applying for financial aid is no longer necessary when attending a community college given that tuition and fees and other costs are lower than at a four-year institution.

Truth be told, many community college students still fill out the FAFSA.

Similarly, many community colleges offer a variety of financial aid types to eligible students, such as:

  • Federal aid
  • State aid
  • Institutional aid

As a matter of fact, around 44% of all community college students in the US received federal grants in the academic year 2017 to 2018. On the other hand, about 25% of them qualified for state aid.

Besides aid coming from the government and academic institutions themselves, there are also scholarships exclusive for community college students from third-party providers.

Some examples of scholarships for community college students include the following:

  • Cappex Easy Money Scholarship
  • Coca-Cola Community College Academic Team Scholarship
  • Completing the Dream Scholarship Program
  • Darrel Hess Community College Geography Scholarship
  • Full Circle Scholarship
  • Golden LEAF Scholarship Program
  • Legacy Scholarship
  • Niche Community College Scholarship
  • Tau Sigma National Honor Society Scholarships
  • Women’s Independence Scholarship Program

10. The More Generous the Aid, the Faster the College Completion

According to the Education Research and Data Center (ERDC), undergraduate students who have a higher percentage of their demonstrated need met by their need-based aid are more likely to complete college.

In addition, they are also more likely to graduate from college faster.

Whether it’s because they are more likely to attend full-time because of higher awards or they are attending full-time and are likely to receive higher awards, the said study says, isn’t clear.

What’s clear, though, is that the pattern is the same for four-year institution students who started at two-year colleges as well as those who entered four-year schools right after graduating from high school.

11. Appealing for More Money is Possible

The figure written on your financial aid award letter is not etched in stone.

After receiving a financial aid decision from the college of your choosing and you are unhappy with what it contains, you may submit a financial aid appeal letter to its Financial Aid Office.

To work, it should provide information as to why you deserve more financial aid.

Submitting an appeal can be done at any given time. As a matter of fact, you may do so, for instance, if the financial situation of your family undergoes a change in the middle of the school year.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily represent those of the College Reality Check.

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