Need-based financial aid is monetary assistance that is awarded to students based on their financial needs. This type of aid can come in the form of grants, scholarships, or loans, and can be used to cover expenses such as tuition, fees, room and board, books and supplies, or transportation. If you took out need-based financial aid and are now struggling to repay it on top of other debts, check out this debt consolidation loan calculator to see how much you can save by combining your debts into one monthly payment.
Here is everything you need to know about this type of financial aid
To be eligible for need-based financial aid, students must first complete the Free Application for Federal Student Aid (FAFSA). The FAFSA will provide information on the student’s family’s financial situation and will be used to determine the student’s eligibility for financial aid. Once the FAFSA has been completed, the student will receive a financial aid award letter from the school outlining the types and amounts of financial aid that have been awarded.
Students who receive need-based financial aid will be required to repay the aid if they withdraw from school or do not complete their degree within a certain timeframe. Additionally, students may be required to repay a portion of the aid if they earn more than a certain amount of money after graduation. For loans, students will also be responsible for paying interest on the loan.
Need-based financial aid can help make college more affordable for students and their families and is an important resource for those who would otherwise be unable to attend college. Students should carefully review their financial aid award letter and terms and conditions before accepting any aid so that they understand their obligations and rights regarding the use of the aid.
Need-based financial aid can be a great way to help students cover the cost of college, but there are some potential drawbacks to consider. One downside is that need-based aid is usually only available for students who demonstrate financial need, which means that many families may not be eligible for this type of aid.
Additionally, need-based financial aid is often based on the student’s expected family contribution (EFC), which is the amount of money the family is expected to contribute towards the cost of attendance. This can create a financial burden for families who are already struggling to make ends meet. Finally, need-based financial aid is typically awarded in the form of loans, which must be repaid with interest. This can add to the financial burden of attending college. For these reasons, it’s important to consider all your options when it comes to financial aid.
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