There is a lot of jargon and very specific terminology used in scholarships and college financial aid, and this can be a serious source of confusion for new students and parents helping their kids navigate the financial maze of paying for school. Once you get familiar with the words that describe specific programs, the vocabulary can even be helpful. Check out this guide if you’re not sure what all the descriptions for a scholarship or financial aid award means!
Merit-based Aid vs Need-based Aid
All financial aid and scholarship programs can be initially divided into two categories: need-based aid and merit-based aid.
- Merit-based aid – Programs providing merit-based aid assign funding based on the academic achievements, or merit, of the students competing. Merit-based programs typically focus on student GPAs, school-related activities, and academic awards. Contests are generally considered merit-based, because winners are selected based on the merit of the essay or invention they’ve produced for the application.
- Need-based aid – On the other hand, financial aid and scholarship programs that provide need-based aid select students based on their financial situation. Students from lower income families and older students with modest incomes are the ones who are most likely to be awarded a need-based scholarship. Some need-based awards may focus on students with specific personal attributes that make self-sufficiency difficult: this would include awards designed to help disabled and chronically ill students, young parents, single mothers, or anyone who is in a circumstance that makes paying for college particularly difficult.
The following financial awards are free money that doesn’t have to be paid back (assuming you live up to the terms of the award!) There are subtle, yet important, differences in what is implied by the following definitions.
- Scholarships – Scholarships are a one-time or recurring award that typically have no strings attached. They’re usually designed to recognize a student’s achievements, or to assist someone in need, or even to promote a specific academic field.
- Grants – Grants are generally awarded for a specific purpose. Most commonly, grants are provided for pure scientific research or in exchange for some other work or effort to be provided by the recipient. Not all grants have these requirements, but it is common enough to ask a few extra questions if it isn’t explicitly stated in the program’s terms.
- Fellowships – Fellowships tend to imply an association: by accepting the fellowship, a student is expected to become a contributing member of the group issuing the funds. This can go so far as to involve maintaining a public image and staying out of controversy, because a fellowship recipient represents the organization.
- Contests – Contests can be anything from random drawings to an award for the best student movie, song, or engineering feat. Random drawings often promote a local business or organization, and contests based on a student submission can have the same effect while also getting students more involved and rewarding the most dedicated and creative entrants.
These are the basic and most common forms of scholarships available for college students, but each program and award is still unique in its own terms and conditions. Always be sure to study a scholarship carefully before applying, but knowing a bit of the general definitions should help you sort through the pile.