Differences Between Scholarships Awarded based on Skills versus Those Given based on Financial Need

In the 2020-21 academic year, U.S. students received approximately $235 billion in financial aid, with the average full-time undergraduate receiving nearly $15,000 to help cover tuition, housing, school supplies, and other expenses. This aid came in the form of grants, tax credits, loans, and work-study benefits.

One of the most common types of financial aid is need-based aid, which is awarded based on a student's financial need. To determine eligibility, students must fill out the Free Application for Federal Student Aid (FAFSA) each year they're in college. Need-based aid includes institutional grants and scholarships, state and federal grants, federal work-study, and federal loans.

In the 2020-21 academic year, around 6.2 million students received Pell Grants, a popular need-based aid program designed for students from low-inccome families. The maximum Pell Grant award for the 2021-22 school year is $6,495.

Merit-based aid, given based on a student's academic and/or extracurricular achievements, is another common type of financial aid. Scholarships are the most common form of merit-based aid and can be offered by nonprofit organisations, private businesses, colleges, and universities.

There are numerous scholarships available for various demographic groups, such as adult learners, students with disabilities, students of color, LGBTQ+ students, military dependents, and families. For example, there are scholarships specifically for students of color, LGBTQ+ students, and military dependents and families.

When it comes to scholarships, it is possible to graduate debt-free. However, it's important to note that private loans, offered through banks or credit unions, can help students fill funding gaps but should be taken out as a last resort due to less favorable terms compared to federal loans.

It's crucial to ensure the accuracy of the information regarding financial aid. Bestcolleges.com, a reputable education resource, has a network of industry professionals, the Integrity Network, to review its content and ensure accuracy. Integrity Network members work full time in their industry profession and review content for Bestcolleges.com as a side project. They suggest changes to inaccurate or misleading information, provide specific, corrective feedback, and identify critical information that writers may have missed.

Lastly, student loan consolidation and refinancing can save a significant amount of money, making it an important consideration for those managing their student debt. It's always a good idea to explore all available options to find the best solution for your financial situation.