Scholarships are awarded to deserving candidates in various fields by the federal government, state governments, private organizations, fee waivers, etc. These are broadly categorized based on certain criteria. Two of the most important categories are based on need and merit. The former relates to monetary requirement, while the latter relates to educational and other relevant factors. The following paragraphs will give you an idea about the subtle differences between need-based and merit-based scholarships.
- As the name indicates, it is offered to students based on their financial situation.
- In other words, this need-based financial aid is a program for those students who wish to study, but are unable to do so due to lack of funds.
- 'Need' is the keyword here, a student may or may not be academically bright, but if he/she wishes to continue his studies, he will be sponsored.
- Need-based grants are offered by different government agencies and other organizations.
- These are offered to students based on their academic performance and other qualifications.
- This scholarship is granted to students who have excellent grades or credits and an excellent academic record.
- 'Merit' is the keyword here, irrespective of a student's financial situation, he/she will be sponsored on the basis of merit.
- These are mostly paid directly by the educational institution that the student attends.
✦ When a scholarship is granted on the basis of need, it is understood that the main point to be considered is the financial status of the student's family. If the family income is low enough to fulfill the eligibility criteria, or if the student has no family or any means to support himself, he is eligible for this grant. The student's need is determined by subtracting the EFC (expected family contribution) from the COA (cost of attendance).
✦ When based on merit, the scholarship should not be misunderstood to be solely requiring academic credits. The desirous student should either possess an excellent academic record, or should indicate talent in music, dance, drama, sports, debate, and many more areas of fields. Apart from academics, possessing an extraordinary trait or certification in any extra-curricular activity can also make a student eligible for receiving this grant.
✦ They are renewable every year; however, if your family's financial circumstances are subject to change, they will change accordingly as well. For instance, if your family income increases by the next academic year, but still falls short of meeting the required criteria, then the financial aid stands within a reliable bracket, and this will continue until you complete the course.
✦ They are also renewable every year, and last throughout graduation. They are subject to change only if some condition is mentioned initially.
✦Your family's financial status will be evaluated using third-party analysis services, like the Private School Aid Service (PSAS) or the Financial Aid for School Tuition (FAST). The family is required to complete the application process with this service as well as submit all their income tax schedule, including the State Tax and Federal Tax Returns. Once the evaluation is done, you will be informed whether you are eligible for the grant or if you are financially well-off to pay at least a part of it. Once you are reported to be eligible, you must submit the Free Application For Federal Student Aid (FAFSA) as well as any other form that the school of college requires. Once this process is complete, you will receive this grant until you complete the course (subject to financial and other conditions).
✦ This grant requires you to be either academically, athletically, or artistically qualified. Certain conditions need to be mentioned before granting the scholarship. You could receive a sports, music, or drama scholarship based on your skill. You may also be awarded this grant if you or your parents are associated with an affinity organization.
✦ Since it is based on need, it will not be discontinued if you score less in a particular semester. The school cannot take away the need due to poor grades. It can be taken away if and only if your family's financial condition improves suddenly, and they are able to pay the fees.
✦Since it is based on merit, a student with sufficient family income and a student with insufficient family income are both evaluated on the same criteria. This means that if you are academically good and have enough credits, you will be sponsored, irrespective of your family income. However, if you score poorly or perform poorly in your area of expertise, your grant can be discontinued immediately.
✦ State grants, Federal Pell grants, Federal Work-Study Programs, Federal Loans, etc.
✦Tuition waivers, college scholarships, etc.
Points to Consider
- According to the National Post-Secondary Survey (NPSAS), your need-based financial aid depends heavily on your SAT scores. If your family earns less and your SAT scores are high enough, you will receive a larger grant and vice-versa. Lower the score, lesser the aid.
- Some grants require you to fulfill the 'bond' requirement. This means that you will need to work for that particular organization for a stipulated period after your course is over, or you will need to repay the money. This happens mostly in nursing scholarships.
- That said, out of both these grants, some will require you to repay, while some will require repayment along with interest.
- If you re being sponsored for your merit, it is not mandatory to accept all the financial aid. It is more of an achievement than a dire need.
- You cannot decide which of the two grants is better than the other, both have their pros and cons and means of adjustment depending on the situation.