Understanding the different types of financial aid

There are two basic types of aid: need-based and non-need-based. Need-based aid is comprised of grants and scholarships that are issued based on the family’s ability to contribute to education costs. Non-need-based aid is allocated based on availability, not need, and includes “merit aid” — grants and scholarships offered to students whose credentials place them in the top portion of a school’s admitted class. Let’s break the categories down further and examine the following: federal aid, state aid, college aid or merit aid, and private scholarships.

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