Student Financial Aid


Student financial aid is a government initiative meant to provide tuition and basic assistance for students in private post-secondary institutions in the United States. The funding provided is often given based on merit, but the grants, work-study opportunities and loans can also be given because of other circumstances, such as financial need. Private institutions may also provide supplementary aid for the students enrolled with them through the form of merit and need-based scholarships. There are strict protocols involved in the allowing of need-based students to apply for financial aid to prevent fraud. However, many students who cannot afford the tuition fees of colleges and universities will go to large lending groups, the government’s program usually offering the lowest interest rates.

Types of Aid

As mentioned before, there are two types of student financial aid: merit-based and need-based. This aid is offered through loans, scholarships and tax benefits, though most student aid is acquired through a FAFSA application, or a Free Application for Student Aid. This application is a stringent process which requires the completion of a detailed questionnaire and several forms that the Department of Education will receive. From this information, the department will tabulate an Expected Family Contribution (EFC) that will be used to calculate the amount of student aid a student should receive.Merit-based aid are scholarships awarded by either colleges or outside organizations that recognize academic achievements, special talents, leadership and various other characteristics.

Need-based aid, on the other hand is provided based on the FAFSA application, but it also may benefit low-income students who receive high SAT scores. Information about applicants given to the government is at times kept private as releasing that information to institution may cause them to inflate their prices based on the respective income of their applicants. Currently, merit-based aid has risen as the result of government initiatives looking to help lower income families who cannot afford the rising cost of post-secondary institutions. This is done in an effort to boost grades from the ground up, and to create a more even playing field for students at both affluent and non-affluent high schools.

Student with a piggy bank and book


There are certain misconceptions about student financial aid in the United States. One is that FAFSA papers are non-transferable, and that you must know if you are accepted or not before you apply. On the contrary, you can use them for nearly all post-secondary institutions. However, you may not qualify for the same type of financial aid at every school. It varies by institution, the more expensive ones often providing larger grants.

Some believe that it is reserved for low-income families, but it actually provides assistance for athletes and talented students. Also, applicants who are not U.S. citizens are eligible if they have a green card or permanent citizenship, and your eligibility is not dependent on the citizenship of your parents.


Federal grants are offered to those who apply for financial aid, but some grants come in the form of loans that will eventually need to be paid back. The PELL Grant and the TEACH Grant are examples of grants that come with varied interest rates, though the government’s assistance has no interest to pay back. Universities, however, have recently been looking to remove loan-based grants from their institutions, and rather now seek permanent grants for more low-income families.Those who do allow loans are now introducing loan caps to save money while also providing clear numbers to the applicants.