What are the Differences Between Scholarships and Financial Aid?

There isn’t a huge difference between scholarships and federal financial aid. The truth is…scholarships are actually another form of financial aid. 

Anything that helps students pay for their college education is considered financial aid and is made of 4 main components; grants, work-study programs, student loans, and scholarships. 

The main difference between federal financial aid and scholarships is, federal aid is awarded based on need whereas scholarships are awarded based on merit. 

This article aims to give you a clear view of their differences.

Scholarship

Scholarships can be best described as a form of aid that requires the student to meet specific requirements while being enrolled in college or university. It’s mostly composed of non-need based grants such as academic, artistic and athletic merit. However, scholarships can also be awarded based on needs. For more information about non-need based aid, click here

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Some colleges will automatically apply students for their scholarships, but it’s always best to go to the website and apply yourself.

You can win scholarships for all kinds of occupations and areas of study. To apply for scholarships refer to scholarships.com and/or fastweb.com. Here’s everything you need to know about need-based financial aid.

Financial Aid

Financial aid is offered by private institutions, federal organizations and state-level corporations. Financial aid awards are mostly based on your family’s income. For instance, the Free Application for Federal Student Aid (FAFSA®)  determines the amount of aid you may qualify for based on your Expected Family Contribution (EFC).  To apply for federal student aid, click here.

This type of aid consists of federal grants and loans. Depending on the type of aid you receive, you may not need to pay back the aid. However, if you take out federal student loans you will need to pay back the money.

Scholarships fall under the financial aid family. Both financial aid and scholarships play a huge role in helping students pay for their college education. The cost of education increases every year, thankfully many organizations and private institutions are offering more scholarships and financial aid to families to help close the gap.