Merit Based Aid vs. Need Based Aid

Paying for College is expensive! There is no question that higher education costs add up quickly and it can be confusing to try to figure out what all of the different terms related to financial aid really mean - especially when the economy is struggling. This is just a brief overview to give you an idea of what you might see/ hear when you are looking at your options.

There are two broad categories of financial aid – Merit Based aid and Need Based aid.

Merit Based aid is what you think of when you think “Scholarships.” These are usually awarded to students based on academic achievements, leadership, athletics, special talents such as art or music, volunteerism, or other personal qualities that set you apart. These scholarships do not consider financial need. A significant portion of all merit-based aid comes directly from the college/ university. Some schools may require additional scholarship applications, essays, interviews, and many colleges will have earlier deadlines to be considered for their scholarships. It can be helpful to know that a lot of times the smaller, private colleges will have more money available for scholarships in order to help make attending their school competitive with the lower costs of the public colleges. Please also remember that there are scholarship offerings listed in PrepHQ. It is important to keep an eye out for unique scholarships that might apply to your personal situation. Last year I had a student who was able to qualify for an Italian heritage scholarship. Perhaps one of your grandparents won a purple heart or maybe you have time to write an essay for one of the other scholarship competitions… no matter what the situation, if you find a scholarship that you meet the criteria for go ahead and apply – you might be pleasantly surprised at the result and if you don’t, the answer is definitely a “no.”

Need Based aid is what you will sometimes hear people refer to as “Financial Aid” even though both Merit Based and Need Based aid technically fall under that one category. There are a variety of different Need Based aid programs. Grants are considered gift assistance – they give you money and you do not have to pay it back. Loans which can come from a wide variety of sources – the federal government, the college, and private banks is money that you are required to pay back. Work Study programs are on campus job opportunities that the government helps find that allows you to earn money for college through working on campus. The big difference between Merit Based and Need Based aid is that Need Based aid is that the type and amount of Need Based aid you will receive depends upon the amount of financial need you have.

And, yes, just to add to the confusion – there are some scholarships that will consider financial need as a criterion. They are still awarding the scholarship based upon some specific aspect of who you are it is just allowing them to narrow down the potential applicant pool.

One last important reminder - NEVER pay to be considered for a scholarship! That is a scam. Don't waste your money!

If you have any questions you can always call the financial aid offices of the schools where you are applying as they are true experts in the field. I am also happy to try to help in any way that I can.