Fund Your Dreams: A Guide on Need-Based Scholarships and How to Qualify for Them

By Austin Osho

What are need-based scholarships?

Need-based scholarships are a type of financial aid provided explicitly to college students based on their financial circumstances. These scholarships are the most commonly awarded form of assistance in the United States and encompass a range of support, including institutional grants, scholarships, state and federal grants, federal work-study programs, and federal loans.

The purpose of need-based scholarships is to assist students who face financial challenges in affording their college education. The primary qualification criteria for these scholarships is demonstrating financial need, although academic achievements may also be taken into account during the selection process.

One distinguishing feature of need-based scholarships is their inclusivity toward students whose parents fall into the lower-middle income bracket. These scholarships aim to support students who may need more financial resources for college but may not qualify for government grants primarily intended for those living in poverty.

Educational institutions, businesses, organizations, or private endowments can offer need-based scholarships. They can cover either partial or complete tuition costs, housing expenses, and sometimes even additional support such as book stipends.

What is the difference between need-based and merit-based scholarships?

With need-based scholarships, financial assistance is provided to students based on their financial circumstances. These scholarships are designed for students from economically disadvantaged backgrounds who can demonstrate their financial need through relevant documentation.

On the other hand, merit-based scholarships are awarded to students who have excelled academically or demonstrated exceptional skills in extracurricular activities. These scholarships recognize and reward students for their outstanding achievements and abilities.

Both need-based and merit-based scholarships are popular among eligible students, with clear criteria and application processes set by providers. Students can apply online or through traditional methods.

What are the benefits of need-based scholarships?

Need-based scholarships carry several significant benefits compared to merit-based scholarships. They:

  1. Need-based scholarships play a significant role in determining a student’s ability to attend college. Unlike merit-based scholarships that consider factors other than financial need, need-based scholarships become the crucial factor that bridges the gap between affording college and being unable to do so. They provide access to higher education for students who may otherwise need more financial means to attend a university.
  1. Promote more significant equity in award distribution: Students from economically disadvantaged backgrounds often face limited opportunities compared to their wealthier peers, affecting their chances of qualifying for merit-based scholarships. For instance, a student who lacks access to private sports coaching and cannot afford travel expenses for away games may be at a disadvantage when applying for athletic scholarships. Similarly, students attending under-resourced schools or dealing with unstable home environments may struggle academically due to insufficient support. In contrast, need-based aid is more inclined to foster fairness and equal opportunities.
  1. Better adaptability to student circumstances: Life changes can significantly impact students academically and in extracurriculars. Merit-based scholarships, relying on specific outcomes, can cause stress during unexpected challenges. In contrast, need-based scholarships are more flexible, providing support tailored to individual situations.
  1. Helping Students Focus on Learning: Scholarships that alleviate financial burdens enable students to concentrate on their studies without the need for extensive part-time or full-time jobs to cover college expenses. Additionally, scholarships often require students to maintain good academic standing, encouraging dedicated studying to maintain eligibility and prevent the loss of the scholarship.

Who qualifies for need-based scholarships? 

  • In general, if you are a low-income or middle-income student, or come from a family with an annual income below $50,000, the availability of need-based financial aid diminishes significantly as your income surpasses $100,000. Many schools that offer need-based aid will start reducing their assistance at this point. As a result, your options for financial aid may become limited to highly competitive colleges
  • Family income plays a significant role, and these scholarships often take into account more than just the Free Application for Federal Student Aid (FAFSA) when determining the amount of aid to award. Premier colleges, such as Ivy League schools and other highly selective institutions, tend to be more generous in granting need-based scholarships to eligible students.
  • The number of dependents within a family is a significant consideration in the scholarship assessment. While colleges place more emphasis on the number of students currently enrolled in college, they also take into account the overall count of dependents supported by the family income.
  • Financial need-based scholarships, offered by schools, federal government grants, and some private scholarships, are awarded to students who meet the eligibility criteria for a federal Pell Grant. Pell Grants are usually granted to students from families with an annual income below $20,000, although those from families earning less than $50,000 per year may also qualify.
  • Families with multiple students in college at the same time experience a significant reduction in their Expected Family Contribution (EFC) number. In such cases, if having one student in college results in a $40,000 EFC, having two students will reduce the EFC for each student to approximately $20,000.
  • In the 2024-25 school year, unfortunately, the sibling discount in financial aid will end. This change, brought about by the FAFSA Simplification Act, means that having multiple siblings in college will no longer affect the Expected Family Contribution (EFC). The updated FAFSA form, available from October 1, 2023, will reflect this new policy.

Types of Need-Based Scholarships

There are a wide range of options available for students to explore. These scholarships come in various forms, each with its own specific requirements and application procedures. Students have multiple avenues to pursue financial assistance tailored to their needs, below is a list of a few;

Federal Scholarships and Grants

A considerable portion of need-based scholarships for students comprises federal financial aid in the form of scholarships and grants. These grants are granted based on financial need and are typically awarded to students facing significant economic challenges. 

Students must grasp the distinction between federal grants and loans. Grants and scholarships do not require repayment as long as students adhere to the terms of the grant agreement. However, student loans must be repaid after graduation and accumulate interest, which means students will ultimately repay more than the initial borrowed amount.

Pell Grants

The Pell Grant program is the largest and most well-known need-based federal grant program for undergraduate students. It provides financial assistance to students who demonstrate exceptional financial need, with a focus on those from low-income families. Grant amounts vary, with a maximum award of $6,345 for the 2020–2021 academic year. These grants are renewable but require an annual reapplication.

Pell Grants only need to be repaid under certain circumstances, like when students drop out of their program or change their enrollment status from full-time to part-time.

Teacher Education Assistance for College and Higher Education (TEACH) Grant

One notable federal grant program is the Teacher Education Assistance for College and Higher Education (TEACH) Grant. This need-based financial aid opportunity is specifically available to students aspiring to become teachers. To qualify, students must meet criteria such as maintaining a 3.25 GPA and passing a certification exam like the PRAXIS or CBEST.

In exchange for the grant, students must sign a service contract committing to work as full-time teachers for four years at a low-income school after graduation. If this commitment is not fulfilled, the grant converts into a loan with interest. The TEACH Grant aims to improve educational outcomes for students with limited resources.

Grants awarded through the TEACH Grant program can reach up to $4,000 per year, providing valuable financial support throughout a student’s college education.

State Grants

States also offer need-based scholarships and grants for students. To qualify, you need to submit both the FAFSA and a state-specific application, as well as be accepted to a public four-year college within your state. It’s worth noting that in addition to resources tied to the FAFSA, students can explore other state-funded options that suit their needs. However, it is crucial to be aware of varying application deadlines to ensure timely submission.

These include;

Alaska Education Grant (AEG)

Amount: $500 to $4,000

Applicants must be Alaska residents who are planning to attend college in the state. Eligibility is determined based on the information provided on the FAFSA. The scholarship is awarded to students with the greatest need first; there are no merit-based considerations for the AEG. Applicants must have completed high school and must not already have a bachelor’s degree.

Oregon Opportunity Grant (OOG)

Amount: Varies

It provides awards to 30,000 students each year, provided those students are pursuing their first undergraduate degree. The FAFSA will determine OOG eligibility. Students must be Oregon residents and meet other financial requirements, including not having federal loans in default. They must maintain a certain standard of academic achievement to continue receiving funding. The amount of money that students can receive varies depending on their tuition costs and expected family contribution, but most awards are under $5,000.

Higher Education Legislative Plan (HELP) Grant

Amount: Varies

To receive this grant, students must live in Mississippi and have a minimum high school GPA of 2.5 and a minimum score of 20 on the National ACT. Applicants must qualify for a Pell Grant to be considered and must be planning to attend a post-secondary institution in Mississippi for their first undergraduate degree. Students receiving this grant will have their entire tuition and fees paid, provided they attend a public institution. The grant will cover the cost of an equivalent public college for private institutions.

Need-based Scholarships for International Students

Fulbright Program for Foreign Students Scholarship

Who Is Eligible?: Requirements for the Fulbright Scholarship vary by country but may include enrollment in a bachelor’s degree program, English proficiency, and citizenship in the country you are applying from. There is a drop-down menu on the Fulbright website where you can choose your country of origin and get specific information about it. You can also find contact information for assistance with your application.

Application Deadline: Varies

Scholarship Amount: Varies

MPOWER Global Citizen Scholarship

Who Is Eligible?: International students who are enrolled full-time in a degree program supported by MPOWER can apply for this scholarship.

Application Deadline: July 15, 2023

Scholarship Amount: $2,000-$10,000

MPOWER Monthly Scholarship Series

Who Is Eligible?: Any international student with a valid visa who is currently enrolled or accepted to study full-time at a school supported by MPOWER. Each month has a special essay to include in the application.

Application Deadline: Last Friday of every month

Scholarship Amount: $1,000-$2,000

#YouAreWelcomeHere Scholarship

Who Is Eligible?: First-year international applicants in any field of study or major to a participating college or university are eligible. In their application, students must demonstrate their interest in promoting intercultural learning and exchange. An essay or video is also required.

Application Deadline: Spring or Summer 2023

Scholarship Amount: Varies

Study a Bachelor’s in the USA Scholarship

Who is eligible? The student must have applied to a U.S. university. The student must meet any language requirements for their chosen program of study. They cannot currently reside in the U.S. unless they participate in a study abroad program.

Application Deadline: June 30, 2023

Scholarship Amount: $5,000

Other Need-Based Grants

Various businesses and organizations offer grants specifically for students with financial needs, but these grants often have specific conditions or requirements. For instance, the Families of Freedom Scholarship Fund distributed $115.9 million in need-based aid between 2002 and 2015, but eligibility was limited to children, spouses, or domestic partners of individuals who lost their lives in the 9/11 tragedy. Here is a list of other organizations providing need-based scholarships:

Nitro Scholarship

Amount: $2,000

Broadly available to anyone currently enrolled in an accredited college or university in the United States. It is also open to high school juniors and seniors.

Two Ten Scholarships

Amount: Up to $4,000

Open to anyone with at least two years’ work experience in the footwear industry who is enrolled in an accredited college or university. This scholarship can be renewed if applicants maintain a GPA of at least 2.5.

Herbert Lehman Scholarship

Amount: $3,000

Open to US citizens with a combined family income of $70,000 or less. Applicants must be attending or planning to attend an accredited four-year college. In addition to financial needs, students will need to demonstrate high SAT and ACT scores. The application also requires an essay, a personal statement, and letters of recommendation. It can be renewed for up to four years.

AICPA Foundation Scholarship

Amount: $5,000

Students must be planning to major in accounting and want to become CPAs. The scholarship is based on financial need and is not renewable.

Fukunaga Scholarship

Amount: $5,000

This scholarship is offered each year for four years. It is open to Hawaiian students who want to study business. Applicants must have a 3.0 GPA and demonstrate financial need. This scholarship is available through the FAFSA.

Lawrence Strader Boy Scouts of America Scholarship

Amount: $7,000

Applicants must be residents of certain Tennessee counties and have a minimum GPA of 2.5. They must be registered with the Boy Scouts of America and have demonstrated financial need. The scholarship is renewable for four years, and the application is open to women as well as men.

Women In Need

Amount: $2,000

Offered by the Educational Foundation for Women in Accounting, this scholarship is for women seeking a degree in accounting. Applicants must be their family’s primary source of support and maintain a 3.0 GPA to renew the scholarship for a second year.

Sharon Stephens Brehm Undergraduate Psychology Scholarships

Amount: $5,000

Open to students (8) hoping to study psychology who demonstrate financial need. They must have a 3.5 GPA in addition to financial need. The application requires a personal essay and a letter of recommendation.

The Gates Scholarship — Funded by the Bill & Melinda Gates Foundation, the Gates Scholarship gives 300 eligible students each year a “last-dollar scholarship,” meaning that it pays for the cost of schooling after federal grants are awarded, ensuring that students of all incomes can pay for college. To qualify, students must be eligible for a Federal Pell Grant.

The Young Scholars Program — Funded by the Jack Kent Cooke Foundation, this pre-college scholarship is awarded exclusively to high-performing seventh-grade students who demonstrate financial need. It may pay for high school tuition, school supplies, summer programs, and extracurricular activities.

The Greenhouse Scholars Program — This program awards graduating high school seniors from Colorado, Georgia, Illinois, New York, or North Carolina with need-based funds to attend four-year colleges. In addition to achieving a GPA of 3.5 or above, Greenhouse scholars must demonstrate a financial need and not have an annual household income greater than $70,000.

Isaac Yunhu Lee Memorial Arts Scholarship – $10,000 scholarship open to low-income students planning to attend or currently attending art school.

Horatio Alger National Scholarship – $25,000 scholarship open to students whose families have an adjusted gross income of $55,000 a year or less.

Charleston Family Trust Scholarship – $3,000 scholarship open to black students with unmet financial needs who demonstrate an interest in serving their community.

What are the conditions for need-based scholarships?

Determining Student Financial Needs

In the process of determining if you qualify for need-based financial aid, you need to

  1.  Begin by filling out the Free Application for Federal Student Aid (FAFSA). FAFSA asks questions about family income and assets. FAFSA then uses a formula to determine the EFC (Expected Family Contribution)
  1. Once you have submitted your FAFSA application, you will receive a document known as the Student Aid Report (SAR). Within the SAR, you will find your Expected Family Contribution (EFC) mentioned.
  1. Your Expected Family Contribution (EFC) will play a crucial role in determining your eligibility for need-based aid. A low expected family contribution increases your chances of qualifying for various types of need-based financial assistance. FAFSA then sends the information to whatever colleges the student is interested in attending.
  1. Colleges determine the cost of attendance (COA), which includes expenses such as tuition, fees, housing, books, meals, supplies, transportation, and miscellaneous items. The COA varies among different schools. According to College Board, the average cost for an in-state public university, including tuition, fees, room, and board, was estimated to be $24,610 for the 2016-17 academic year.
  1. The financial aid office of a college calculates the student’s need by subtracting the Expected Family Contribution (EFC) from the Cost of Attendance (COA). The resulting amount represents the student’s financial need. Students with higher financial needs are typically awarded more grant money. The calculation is as follows: COA (tuition, room, board, textbooks, supplies, etc.) – EFC = student need.
  1. Timing is essential when applying for financial aid. Submitting the FAFSA early greatly increases your chances of receiving favorable need-based aid packages, often with minimal student loans. In certain states, grants are awarded on a first-come, first-served basis, making early filing even more advantageous. If necessary, you can provide estimated answers to some questions initially and update them later.

What GPA do you need to get a need-based scholarship?

When it comes to need-based scholarships, they are not solely awarded based on a student’s grade level or educational excellence. However, it is crucial to ensure that your application stands out among the competition and presents a well-rounded profile.

Having a 4.0-grade point average is not just a high GPA but an impressive achievement that is likely to capture the attention of scholarship providers. Since many full-ride scholarships require a minimum GPA of 3.5, a 4.0 GPA always exceeds the requirement.

How to apply for a need-based scholarship?

To apply for need-based scholarships, students need to provide financial documents that demonstrate their family’s financial situation. It is essential to complete the Free Application for Federal Student Aid (FAFSA) to be eligible for these scholarships.

Typically, need-based scholarships require applicants to be US citizens or permanent residents, although specific requirements may differ. Some scholarships may only request financial information, while others may also require an essay explaining why the student deserves the scholarship. In certain cases, scholarships may have a merit-based component where they consider GPAs or extracurricular achievements.

Many scholarships for financial need are exclusively available to students who have been accepted to an accredited college or university. Some scholarships may specifically require full-time enrollment rather than part-time. Various organizations, corporations, and colleges provide both need-based and merit-based scholarships, catering to students in diverse circumstances. Eligibility criteria vary, so it is crucial for students to carefully review the requirements for each scholarship before initiating the application process.

Tips for Starting a Need-Based Scholarship

Here are some top tips to increase your chances of winning need-based scholarships:

  • Seek out universities or colleges that provide substantial financial aid packages. Not all schools offer the same level of generosity in terms of financial assistance. It is advisable to apply to institutions that have a reputation for offering significant financial aid to their students.
  • Explore scholarships that align with your unique background. Scholarships are available for students from various racial, gender, religious, ethnic, and economic backgrounds. Take the time to search for scholarships that specifically cater to your profile and qualifications.
  • Seek assistance when applying for scholarships. Conducting a comprehensive search for scholarships can be time-consuming.

In summary, you have seen that it is possible to overcome high tuition costs and achieve your college degree with need-based scholarships. These scholarships provide ample opportunities for financial assistance, ensuring that your educational aspirations are within reach. Take advantage of the available financial aid options to fulfill your academic ambitions.

At Scholarship Monitor, we are committed to providing you with up-to-date information on scholarship opportunities. Make sure to always check back for more updates and take advantage of the resources we have provided to help you achieve your academic and career goals.

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