Quick Scoop

Need-based financial aid is money for school that’s awarded based on a family’s financial situation, not grades or talents. Colleges usually look at income, assets, family size, and the cost of attendance to figure out how much help you may need.

How it works

Schools compare the cost of attendance with your family’s ability to pay. The difference is your financial need, and that amount helps determine the aid package you may receive.

What it can include

  • Grants.
  • Work-study.
  • Subsidized federal student loans.
  • In some cases, school-based tuition discounts or waivers.

How to apply

Most students start with the FAFSA, and some colleges also require the CSS Profile. These forms help schools calculate eligibility for aid based on your financial information.

Simple example

If a college costs 40,000 and your family’s calculated ability to pay is 15,000, your financial need is 25,000. The school may try to cover part or all of that with a mix of grants, work-study, and loans.

Bottom line

Need-based aid is designed to make college more affordable for students who demonstrate financial need, and it is different from merit-based aid, which is awarded for achievements.

TL;DR: Need-based financial aid is college money based on financial need, usually determined through FAFSA and sometimes CSS Profile, and it may include grants, work-study, and subsidized loans.