What Is Financial Aid?
Student financial aid is funding intended to help students pay education expenses including tuition, books and supplies, etc. for education at a college, university, or private school. General governmental funding for public education is not called financial aid, which refers to awards to specific individual students. A scholarship is sometimes used as a synonym for a financial aid award, although grants and student loans are also components of financial aid packages from students’ intended colleges.
Types of Financial Aid
Financial aid may be classified into two types based on the criteria through which the financial aid is awarded: merit-based or need-based.
Merit-based grants or scholarships include scholarships awarded by the college or university and those awarded by outside organizations. Merit-based scholarships are typically awarded for outstanding academic achievements and maximum examination scores, although some merit scholarships can be awarded for special talents, leadership potential and other personal characteristics. Scholarships may be given because of group affiliation. Merit scholarships are sometimes awarded without regard for the financial need of the applicant. At many colleges, every admitted student is automatically considered for merit scholarships. At other institutions, a separate application process is required. Scholarships do not need to be repaid as long as all requirements are met.
Need-based financial aid is awarded on the basis of the financial need of the student.