Need-based financial aid works by offering funding based on your family’s finances. It’s meant to cover what the school considers to be your financial need.
Depending on the school and type of aid, the following factors usually influence your eligibility for need-based aid:
Usually, schools use your expected family contribution (EFC) to determine your financial need. Your EFC is the amount of money your school thinks your family can afford to put toward a year of your education, regardless of the cost of attendance (COA).
Here’s how schools calculate your need-based aid:
Cost of attendance – expected family contribution = Financial need
That number is the maximum amount you can receive in need-based aid. If you go to a school that meets 100% of financial need, it’ll cover this with a combination of scholarships, grants and loans. Otherwise, you might need to use a combination of need- and merit-based aid as well as student loans to cover the cost.
Typically, schools calculate your EFC based on the answers you provided in the Free Application for Federal Student Aid (FAFSA) or the College Scholarship Service (CSS) Profile. You can get an estimate of your EFC based on the FAFSA by using the FAFSA4caster tool, which is available on the Federal Student Aid website.
The following types of financial aid are based on need:
Some scholarship programs also consider a combination of financial need and merit when you apply, though they aren’t strictly need-based financial aid.
It depends on the type of financial aid you receive. You don’t have to pay back grants or scholarships. And you pay for work-study with labor, rather than money. But you have to pay back any loans in your name, even if the amount you received is based on financial need.
Generally, you need to fill out both the FAFSA and the CSS Profile to be considered for need-based financial aid. Check with your school’s financial aid office first to see what’s required. Not every school accepts the CSS Profile, and some might require an additional application for certain need-based programs.
Maximize the amount of need-based financial aid you receive with these pointers:
You can. If you’ve maxed out your need-based aid, you can apply for the following types of aid:
Need-based financial aid is based on the amount your school thinks your family can contribute toward your education. But that doesn’t guarantee you’re going to receive up to 100% of that amount. You might need to apply for more need-based aid or consider other options to cover your full COA.
You can learn more about how paying for school works by checking out our guide to student loans.
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