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

Popular Courses. Part Of. Saving for College. College Saving Plans. Getting Started. Scholarships and Grants: Free Money. Types of Student Loans. What Loans Cost. Decoding Student Aid Offers. Best Student Loans. Managing Loans During College. Loan Basics Student Loans. Table of Contents Expand. What Is a Scholarship? Need-Based Scholarships and Grants.

Non-Need—Based Federal Aid. Merit Scholarships. What is the Difference Between Need vs. Merit-Based Scholarships? Bottom Line. Key Takeaways Scholarships and grants reduce the cost of attending college and, unlike loans, don't have to be repaid.

Need-based federal grants, such as Pell Grants, are intended for students with what the government calls "exceptional financial need. Article Sources. Investopedia requires writers to use primary sources to support their work.

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Saving for College. Cost of College. Merit-Based vs. Share on Social. What Is Merit-Based Aid? Merit-Based Aid vs. Need-Based Aid College students may receive both merit-based and need-based aid to help fund tuition and other costs, including school supplies and housing.

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Federal student aid is need-based. That means it doesn't discriminate by any factor apart from financial need.

Eligibility is based solely on the assets and income of the prospective student and his or her family. Factors such as test scores or athletic ability have no bearing on need-based aid. On the other side of the coin is merit-based aid. Merit includes a variety of talents and interests: academic, artistic, athletic, and the list goes on.

Scholarships are the most common type of merit-based aid though some do have a need-based component , which may come from the school or from outside sources. Assuming need is not a condition, a student with extensive assets and income is just as entitled to a merit-based award as a student with limited assets and income. For the far majority of students, the chief source of financial aid will be need—based aid.