Flickr user matthewreid
College can be quite expensive, which means you’re looking for ways to afford it. As you look for aid to help pay for college, you’ll hear a lot of phrases and acronyms. These are two phrases you probably hear a lot while you’re researching scholarship and financial aid opportunities: need-based and merit-based. But what is the difference between the two? Is one better than the other? Let’s break it down.
Need-Based Aid
The word “need” is key here. Need-based aid refers to the financial need a student has in regards to paying for college. Need-based aid programs focus entirely on that aspect. College is expensive, and so need-based aid is abundant.
One great way to seek out this form of aid is to complete the FAFSA, or the Free Application for Federal Student Aid. It’s a form that’s used by the federal government to evaluate need and what sort of aid each student can potentially receive. Most students who file the FAFSA get some sort of aid, and even if they don’t many other sources of aid use the FAFSA form as well—like some private scholarship providers. Absolutely file the FAFSA, even if you don’t think you qualify for any aid. Not only does it open you up to the school’s scholarships and grants, a lot of outside scholarships also want it.
Need-based aid is not affected by things like academic achievement, leadership experience, GPA, test scores, or the like. That’s merit-need territory.
Merit-Based Aid
Unlike need-based, merit aid focuses on things other than the financial situation of a student (though that can still be a factor). Instead, merit aid takes into account a students GPA, their ACT/SAT test scores, their honors or accolades, extracurricular activities, and even things like religious affiliation, major interest, ethnicity, and other attributes.
Merit-based aid is often dependent on whoever the sponsor is. Perhaps they studied a certain subject in school and want to foster than in college-bound students. Maybe a group or organization wants to host an essay contest, and the winner gets a scholarship. Merit aid is as diverse as the people applying for it. Most likely, there’s a merit-based award out there that suits you! And again, definitely file the FAFSA so that you qualify for these awards. You never know how many awards a school has that you qualify for.
Which One Is For You?
Both need-based or merit-based aid are beneficial to students. Not only that, merit-based aid encompasses so many different aspects that aren’t limited to your academic grades. We can’t stress this enough: file your FAFSA! Everyone should file their FAFSA to get as much financial aid as possible. The last thing you want is more student loan debt, when there are so many scholarships, grants, merit-, and need-based aid out there for you. Take advantage of the merit- and need-based aid your college has.
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| Lender | Rates (APR) | Eligibility | |
|---|---|---|---|
 |
5.50%-16.12%* Variable
3.99%-15.61%* Fixed
|
Undergraduate and Graduate
|
VISIT CITIZENS |
 |
5.54% - 15.70% Variable
3.99% - 15.49% Fixed
|
Undergraduate and Graduate
|
VISIT SALLIE MAE |
 |
5.00% - 17.99% Variable
3.49% - 17.99% Fixed
|
Undergraduate and Graduate
|
VISIT CREDIBLE |
 |
6.00% - 13.75% Variable
3.99% - 13.75% Fixed
|
Undergraduate and Graduate
|
VISIT LENDKEY |
 |
5.66% - 14.72% Variable
3.69% - 14.56% Fixed
|
Undergraduate and Graduate
|
VISIT ASCENT |
 |
3.70% - 8.75% Fixed
|
Undergraduate and Graduate
|
VISIT ISL |
 |
5.62% - 16.85% Variable
3.69% - 16.49% Fixed
|
Undergraduate and Graduate
|
VISIT EARNEST |
 |
5.00% - 14.22% Variable
3.69% - 14.22% Fixed
|
Undergraduate and Graduate
|
VISIT ELFI |
