Need-based financial aid is a form of college-funding that takes into account your family’s size, income, and assets. This type of funding can help low-income families afford to send their children to college.
The United States government has a financial aid program to help students pay for college. It is called need-based financial aid and it provides funding based on your family’s finances.
You will have access to this if you can’t afford tuition in full, or even at all. Here’s what needs-based student loans are, how they work, and who qualifies!
Who Qualifies for Need-Based Financial Aid?
To qualify for need-based financial aid from the US government, you must be a U.S citizen or permanent resident with a social security number and meet other eligibility requirements to receive Federal Pell Grants, loans, work-study programs, and more.
The FAFSA is your first step in detailing the family’s financial information. The Department of Education uses this application to determine how much money you will have access to for school and other expenses, called EFC or expected family contribution.
How Do You Determine If Your Family Might Qualify For Need-Based Financial Aid?
You can start your college financial planning by plugging in the information about your family to an EFC calculator. By estimating how much money you or your parents will be able to give, this calculator is a great way for you and other members of the household (such as siblings) to understand if one person will need more help with their education than another.
- if your EFC ends up being more than the cost of the colleges you’re applying to you don’t qualify for financial aid.
- if your EFC is less than the cost of the colleges you’re applying to the difference is your need-based aid eligibility.
Different colleges have different cost priorities and funding levels you should also run a net price calculator for any college you’re interested in a net price calculator can be found on every college’s website and is the best tool available to determine whether or not you qualify for financial aid at a given school.
Be careful that even if you qualify for need-based financial aid, it might not be enough to cover your costs. Many free need-based options are awarded on a first-come, first-served basis.
This means you want to complete the FAFSA as soon as possible so that you can get the money. You can submit your FAFSA starting October 1st for school starting in the fall of 2021.
5 Types of Need-Based Financial Aid
You’re about to receive your financial aid package from college, but do you know what it includes? It can be any of the following types:
Federal grants are monetary awards from the federal government that help fund research, academic projects, and other endeavors. Grants can range in size depending on what they’re funding for; some may only cover a portion of your project’s cost while others could provide complete funding!
Federal Work-Study helps students pay for their education by allowing them to work part-time and earn money. The program encourages community service in order to give back, as well as allow the student’s coursework to be useful on a day-to-day basis while still getting paid.
Federal Student Loans
Federal student loans are a great way to finance your education, with these benefits:
- Fixed interest rates and income-driven repayment plans offer relief in tough times.
- A variety of different programs for any educational needs you may have including
forgiveness policies and more tuition assistance than most private institutions can even dream about!
State Need-Based Grants and Scholarships
A multitude of states offers financial aid programs for college students. These state-specific grants and scholarships vary from school to school; each university has its own set of allowances, so it is best that you contact the Financial Aid office on your campus if you are interested in applying or have any questions about a specific need-based program offered by your respective institution.
The United States government has a system that awards money in scholarships called Pell Grants. A Pell Grant is a type of federal grant awarded to undergraduate students who display strong financial needs.
This can be tuition assistance or funding for living expenses, and it also ensures that all types of students have the same access as others financially are able. These federal grants of up to $6,495 for the 2020-2021 academic year are available exclusively for students with an EFC and school’s COA. They’re based on your particulars and adjusted by your needs!
School’s Own Need-Based Grants and Scholarships
Many colleges offer a variety of other financial aid packages and grants. These are often dependent on your need for assistance which you can determine with an application called FAFSA (Free Application for Federal Student Aid).
Oftentimes these programs will combine both types of awards so that students who have high academic achievements but lower income levels still get some level of support to help pay tuition.
Applying for Need-Based Financial Aid
Applying for need-based financial aid is a difficult process. Even applying for scholarships can be hard and time-consuming if you don’t have the right information to give to the scholarship committee. How to do it:
- Create your FSA ID by visiting the Create New Account page. Be sure to follow all of the instructions before you submit anything, or else you might not be able to access it again!
- It is very important to Gather all necessary documents, including tax and financial documents. You will not be able to start the process of filling out your FAFSA application if you do not have these things in front of you. The reason it’s so important is that without this information there would be a lot more work than schools or other organizations would have to do on their own behalf. Either way, make sure to gather all necessary documents before starting the FAFSA application process – trust me, it can take hours.
- Complete your FAFSA as soon as the enrollment period opens (Oct. I every year) to maximize your financial aid eligibility, which is always dependent on income and assets from the previous year’s tax.
- Applying for need-based financial aid – Review your Student Aid Report and make any corrections, if necessary.
- Accept your award letter, including scholarships, grants, work-study, and if necessary student loans (you can deny any or all of your aid offer). Accepting an aid offer is not binding. You may change to another school with less financial need in the months before classes begin without having to repay any money.
- Get your federally funded and state-funded grants sent directly to your college or university, and tell us what school you want them delivered to.
- You should submit your FAFSA every year, otherwise, you can’t get any more financial aid.
What Is The Difference Between Need-Based and Merit-Based Financial Aid?
The difference between need-based and merit-based financial aid can be difficult to understand. The difference lies in the way that each type of financial aid is awarded. Merit-based aid is based on a student’s previous academic performance, or how they have done with their studies thus far.
Need-based aid is given out to students who cannot afford tuition without it, but whose grades may not reflect this fact. It’s not uncommon for students to be confused about what type of financial aid they qualify for. Merit-based aid is often available at smaller, private schools while need-based aid makes up the bulk of larger public institutions’ offerings.
Frequently Asked Questions About What is Need-Based Financial Aid
Is need-based financial aid the same as FAFSA?
There are many ways to get the money for school, but one of the most popular options is need-based financial aid. To qualify you first must complete FAFSA which stands for Free Application For Federal Student Aid.
The Department Of Education uses this application and your family’s personal information in order to determine what they believe will be a fair EFC or expected Family Contribution Dollars amount given their income level and any other factors that affect it such as the number of kids attending college at once!
What Does Need Mean in Financial Aid?
There are many factors that determine just how much it will cost you to go to school. The COA or Cost of Attendance varies from college to university so this number is different for every institution.
However, there’s one thing that stays the same no matter what your choice is: Your expected family contribution (EFC). Financial Need can be defined as “the difference between the (COA) costs of attendance and an individual’s (EFC) Expected Family Contribution”