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Types of financial aid
Merit-based
Merit-based scholarships include both scholarships awarded by
the individual college or university and merit scholarships awarded
by outside organizations. Merit-scholarships are typically awarded
for outstanding academic achievements, although some merit scholarships
can also be awarded for special talents, leadership potential and
other personal characteristics. 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 schools, however, a separate application
process is required.
Athletic scholarships are a form of merit aid that take athletic
talent into, account.
Need-based
Need-based financial aid is awarded on the basis of the financial
need of the student. This type of aid is commonly awarded in the
United States.
In the United States
The United States federal government provides need-based federal
aid called Federal Student Financial Aid, which is composed of different
programs, grants, and scholarships including Federal Pell grants,
Federal SEOG Grants, SSIG Grants, Smart Grants, Academic Competativeness
Grants, Federal Work-Study, Federal Stafford loans (in a subsidized
and unsubsidized form), Federal Perkins Loans, and Federal Parent
(PLUS) loans. Federal Perkins Loans are made by participating schools
per annual appropriations from the US Department of Education, whereas
Federal Stafford Loans and Federal PLUS Loans are made by participating
lenders under the Federal Family Education Loan Program (FFELP).
The US Department of Education serves as a lender and guarantor
under the William D. Ford Direct Loan Program. Schools with graduate
and/or professional programs may act as a lender under the FFELP
(if they met all criteria for the program and made their first loan
by 4/1/2006).
In order to qualify for federal student aid (except for Federal
PLUS Loans), a student must file the Free Application for Federal
Student Aid (FAFSA).The FAFSA uses a calculation taking into account
income and assets to determine a student's "Expected Family
Contribution (EFC)" toward his or her college education for
that year. Colleges use the EFC to decide what types of financial
aid a student is eligible to receive. Students must complete the
FAFSA each year in order to be considered for financial aid.
State governments also typically provide some types of need- and
non-need based aid, consisting of grants, loans, work-study programs,
tuition waivers and scholarships. Individual colleges and universities
may provide grants and need- and merit-based scholarships. Students
requiring financial aid beyond what is offered by their institution
may consider a private (alternative) educational loan, available
from most large lending institutions. Typically, educational loans
obtained through the federal government have lower interest rates
than private educational loans.
Institutions may also offer their own student financial assistance,
in the form of need-based or merit-based aid, as well as endowed
scholarships (with varying need and/or merit-based criteria). Some
schools may only require the FAFSA; some may also require an additional
need-based analysis document, such as the CSS Profile, to apply
for such funds, in order to apply a more stringent need analysis
for the rationalization of institutional funds.
Outside the United States
The United States federal government provides need-based federal
aid called Federal Student Financial Aid, which is composed of different
programs, grants, and scholarships including Federal Pell grants,
Federal SEOG Grants, SSIG Grants, Smart Grants, Academic Competativeness
Grants, Federal Work-Study, Federal Stafford loans (in a subsidized
and unsubsidized form), Federal Perkins Loans, and Federal Parent
(PLUS) loans. Federal Perkins Loans are made by participating schools
per annual appropriations from the US Department of Education, whereas
Federal Stafford Loans and Federal PLUS Loans are made by participating
lenders under the Federal Family Education Loan Program (FFELP).
The US Department of Education serves as a lender and guarantor
under the William D. Ford Direct Loan Program. Schools with graduate
and/or professional programs may act as a lender under the FFELP
(if they met all criteria for the program and made their first loan
by 4/1/2006).
In order to qualify for federal student aid (except for Federal
PLUS Loans), a student must file the Free Application for Federal
Student Aid (FAFSA).The FAFSA uses a calculation taking into account
income and assets to determine a student's "Expected Family
Contribution (EFC)" toward his or her college education for
that year. Colleges use the EFC to decide what types of financial
aid a student is eligible to receive. Students must complete the
FAFSA each year in order to be considered for financial aid.
State governments also typically provide some types of need- and
non-need based aid, consisting of grants, loans, work-study programs,
tuition waivers and scholarships. Individual colleges and universities
may provide grants and need- and merit-based scholarships. Students
requiring financial aid beyond what is offered by their institution
may consider a private (alternative) educational loan, available
from most large lending institutions. Typically, educational loans
obtained through the federal government have lower interest rates
than private educational loans.
Institutions may also offer their own student financial assistance,
in the form of need-based or merit-based aid, as well as endowed
scholarships (with varying need and/or merit-based criteria). Some
schools may only require the FAFSA; some may also require an additional
need-based analysis document, such as the CSS Profile, to apply
for such funds, in order to apply a more stringent need analysis
for the rationalization of institutional funds.
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