Need-based Financial Aid
Most people believe they need financial assistance to pay for college. Because there is so much need and funds are limited, the federal government has set policies to measure need. Most financial aid is based on need.
Need-based means that your family's financial resources, as measured by a formula established by the federal government, are not sufficent to cover your educational costs. This formula analyzes a family's income and assets to determine its Expected Family Contribution (EFC) toward the cost of college.
The federal government's definition of financial need compares your income and savings to the cost of the college you plan to attend. Therefore, if you choose to attend a local community college, your financial need may be small, while if you choose to attend a higher priced college, your financial need may be large.
Once you determine your financial need, the college you plan to attend will help you identify sources of financial aid to meet your need. If you apply for assistance early, college staff may be more successful in finding financial aid.
Most financial aid packages include a variety of types of aid, including:
- scholarships or grants (money that does not need to be paid back)
- loans (money that is paid back, usually at lower interest rates than other types of loans)
- work-study (a job on campus)
Need-based financial aid can come from:
- federal government
- state government