What is the difference between need-based and merit-based financial aid?

Hey guys, I'm a junior, and I've been hearing a lot about need-based and merit-based financial aid. Can someone explain the difference between the two? How do colleges determine who receives each type of aid? Thank you in advance!

Hi there! It's great that you're starting to learn about financial aid options early on in your college search. Need-based and merit-based financial aid are indeed two distinct types of aid, and understanding the difference between them can be quite helpful in planning how you're going to afford your tuition. Let me break it down for you.

Need-based financial aid is determined by a student's financial need. It is awarded to help bridge the gap between the cost of attendance and what a family can reasonably be expected to contribute. To assess your eligibility for need-based aid, colleges typically require you to submit the Free Application for Federal Student Aid (FAFSA) and/or the CSS Profile. These forms help institutions evaluate your family's financial situation and calculate your expected family contribution, then determine the difference between that contribution and what a particular school charges for tuition.

Merit-based financial aid, on the other hand, is awarded to students based on their academic, athletic, artistic, or other talents, regardless of their financial need. Merit scholarships are often granted by colleges based on your high school performance, standardized test scores, or extracurricular achievements. There are also some scholarships that are awarded based on your dedication to community service, or other narrower criteria.

In summary, need-based financial aid depends on your financial situation, while merit-based aid is based on your achievements and talents. I hope this helps! Good luck with your college search and application process!