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    Financial Aid What is Need-Based Financial Aid?
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    What is Need-Based Financial Aid?

    Will Geiger
    By Will Geiger
    Will Geiger

    Will Geiger is the co-founder of Scholarships360 and has a decade of experience in college admissions and financial aid. He is a former Senior Assistant Director of Admissions at Kenyon College where he personally reviewed 10,000 admissions applications and essays. Will also managed the Kenyon College merit scholarship program and served on the financial aid appeals committee. He has also worked as an Associate Director of College Counseling at a high school in New Haven, Connecticut. Will earned his master’s in education from the University of Pennsylvania and received his undergraduate degree in history from Wake Forest University.

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     , reviewed by Caitlyn Cole
    Caitlyn Cole

    Caitlyn Cole is a college access professional with a decade of experience in non-profit program and project management for college readiness and access organizations.

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     and Maria Geiger
    Maria Geiger

    Maria Geiger is Director of Scholarship Services at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.

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    Updated: July 30th, 2025

    As you apply to college, you may find yourself wondering what need-based financial aid is. In general, need-based aid is any financial aid awarded solely on your family’s financial situation. Need-based aid one of the most common types of financial aid that students use to pay for college.

    There are three main types of need-based aid. These are grants, loans, and work-study. Students don’t need to work for or repay grants. Loans must be repaid once the student is no longer in school. Work-study must be earned through a campus job while the student is studying.

    Keep on reading to learn everything you need to know about need-based grants, loans, and scholarships!

    What does need-based financial aid include?

    Need-based financial aid is awarded by the federal government, states, colleges, and private organizations. 

    Questbridge is a well-known scholarship program that aims to support high-achieving, low income students in the United States.

    How is need-based financial aid awarded?

    Need-based financial aid is awarded according to a student’s demonstrated financial need. College financial aid offices will assess this through the Student Aid Index (SAI). The SAI is a number used by your school to calculate how much financial aid you are eligible to receive. An SAI is generated after a student successfully completes their Free Application for Federal Student Aid (FAFSA).

    The SAI number can range from 0 (which means they estimate that you can’t afford to spend anything) all the way up to the full cost of attendance.

    Expert Perspective

    Expert Perspective

    If your financial need is high enough that your SAI is 0 (or negative) applying ED to schools with very strong need-based aid like Swarthmore, Penn, Dartmouth, Columbia, or other schools that meet 100% need can be wise. That’s because if your application is competitive and you can get into these schools, they will likely offer you strong enough financial aid to allow you to attend.
    Lynell Engelmyer

    Lynell Engelmyer | College admissions and financial aid advisor, Alexander Hamilton Scholars

    Estimating need-based financial aid

    If you are interested in estimating need-based financial aid, we’ve got a great tool for you! The Net Price Calculator is a free tool that every college offers to provide an estimate of financial aid!

    The Net Price Calculator is college-specific as every college’s financial aid methodology is different. This is a great way to start researching what need-based financial aid might look like for you and your family.

    As a bonus, some colleges will also estimate merit scholarships as part of their Net Price Calculator. Usually they will ask a few questions about testing, grades, and classes.

    Remember, the Net Price Calculator is not 100% accurate and you will not receive your official financial aid until you actually apply for financial aid and are accepted by the college.

    Applying for need-based aid

    The most important form for applying for need-based financial aid is the Free Application for Federal Student Aid or FAFSA. The FAFSA is how students access need-based grants, loans, and work study.

    Some colleges and universities may also require the CSS Profile. The CSS Profile goes into a bit more depth than the FAFSA and may capture additional data points for the college.

    Remember, simply applying for need-based financial aid does not ensure that you will actually receive need-based financial aid. If you are accepted to a college and applied for financial aid, you will receive a financial aid award letter that explains the aid that you were awarded. These award letters may come in the mail, but will more likely show up in your online student portal when they’re available. 

    Apply to these scholarships due soon

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    "A Helping Hand" Scholarship
    1 award worth $1,000
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    $10,000 "No Essay" Scholarship
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    The Gates Scholarship
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    Questbridge National College Match Scholarship
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    Jack Kent Cooke College Scholarship
    Jack Kent Cooke College Scholarship
    Multiple awards worth up to $55,000
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    Jackie Robinson Foundation Scholarship
    Jackie Robinson Foundation Scholarship
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    ENF Emergency Educational Grants
    ENF Emergency Educational Grants
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    South Carolina Tuition Grants
    South Carolina Tuition Grants
    Multiple awards worth Varies
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    Greenhouse Scholars Program
    Greenhouse Scholars Program
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    Live Your Dream Award
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    Multiple awards worth $1,000 - $16,000
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    Do I need to repay need-based aid?

    Some types of need-based financial aid need to be repaid. Grants and money earned through a work study will not need to be repaid, but federal student loans, like the Federal Direct Loan, need to be paid back in the future. 

    This is one of the reasons that students should still pursue merit scholarships and outside scholarships in addition to need-based financial aid.

    Reapplying for need-based aid

    Need-based grants, loans, and work study are only good for a single academic year. This means that you must reapply for need-based aid each year you are in college. Each year, you will need to resubmit the FAFSA as well as the CSS Profile so that you can continue to receive financial aid for each year of college. Make sure you know your college’s financial aid deadlines so that you don’t miss reapplying each year and reach out to your college’s financial aid counselors for support!

    Key Takeaways

    Key Takeaways

    • For every college you are considering, use their Net Price Calculator to estimate your need-based financial aid package
    • To actually apply for financial aid you will have to compete and submit the FAFSA by the deadline
    • Some colleges may require the CSS profile as an additional application. Remember, every college will have a different CSS Profile deadline!
    • If you are a current student, you will also have to reapply for financial aid each year you are in school

    Frequently asked questions about need-based financial aid

    Is the FAFSA a need-based scholarship?

    The FAFSA is not a scholarship. The FAFSA is an application that students fill out annually in order to qualify for federal financial aid. Federal aid may include grants, loans and programs like the federal work study program. Not all of the funds you receive through the FAFSA will need to be repaid, but some will. Make sure it is clear what funds you will need to pay back before you agree to anything.

    What is an example of a need based grant?

    A great example of a need based grant is the Pell Grant. The Pell Grant is given to students who have filled out the FAFSA and qualify for it. The amount that you receive from the Pell Grant may vary depending on the amount of need you display and the max amount that the Pell Grant is worth that year. The current max amount you can receive yearly from the Pell Grant is $7,395.

    How do I ask for a need-based scholarship?

    Filling out the FAFSA will be one of the most important things you do when seeking out need based financial aid. Many scholarships that are need-based may ask you to provide some proof of financial need, which at times may be the FAFSA, but also might need to be proven through other documents, such as a tax return. If you can’t prove that you have a real need for financial help, you will likely not be eligible for some scholarships and grants.

    What is the difference between financial aid and need-based aid?

    Financial aid refers to any money given or lent to students for educational expenses, this can be scholarships, grants or loans. Need-based aid is a type of financial aid given to students based on their financial need. So a merit scholarship, for example, which takes into account academics or certain skills or achievements, is not considered need-based aid.

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